Category:

Sinopec Profit Drops as Crude Slump Beats Out Refining Gains

China Petroleum & Chemical Corp.’s third-quarter profit plummeted 92 percent as lower oil prices and production dwarfed an increase in refining revenue. Net income at Asia’s biggest refiner, known as Sinopec, was 1.64 billion yuan ($258 million), or 0.013 yuan a share, compared with 19.3 billion yuan, or 0.165 yuan, a year earlier, the Beijing-based company said in a statement to the Shanghai Stock Exchange on Thursday. That compares with the 4.27 billion yuan average of three analyst estimates compiled by Bloomberg. Higher refining revenue was swamped by a drop in oil prices. Brent, the benchmark for more than half of the world’s crude, averaged about $51 a barrel in the third quarter, compared with more than $103 a year ago. Prices have slumped more than 45 percent in the past year amid a global glut that the International Energy Agency estimates will remain until at least the middle […]

Posted On : Published By : Tom Whipple
Category:

PetroChina Profit Plunges to Record Low on Oil Price Rout

PetroChina Co., the country’s biggest oil and gas producer, posted its worst quarterly profit as a plunge in crude prices punished revenue. The company, faced with a “complicated and grim operating environment,” posted net income of 5.2 billion yuan ($818 million), or 0.03 yuan a share, compared with 27.9 billion yuan, or 0.15 yuan, a year earlier, it said in a statement to the Hong Kong stock exchange on Thursday. That compared with the 10.9 billion yuan average of four analyst estimates compiled by Bloomberg and the lowest earnings since 2007, when Bloomberg started compiling quarterly data on the company. “It’s a pretty weak performance across all segments,” Neil Beveridge, an analyst at Sanford C. Bernstein & Co., said by phone from Hong Kong. “PetroChina is struggling in the low crude environment and needs to find a way to stop the bleeding.” The Beijing-based company relies on oil and […]

Posted On : Published By : Tom Whipple
Category:

Oil Producers Curb Megaproject Ambitions to Focus on U.S. Shale

Big U.S. oil companies are starting to think small. A stubborn 16-month crude rout with no end in sight is driving the largest U.S. oil producers away from costly, high-risk megaprojects long touted as the industry’s future and toward safer shale operations that generate the cash needed to satisfy anxious investors. Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., ConocoPhillips and Hess Corp. have all either delayed or abandoned projects that range from the deep seas of the Gulf of Mexico to Canada’s oil sands and the U.S. Arctic. At the same time, Exxon and Chevron both announced plans to substantially increase U.S. crude production, largely as a result of their shale operations. “What makes more sense in this environment: drill a $100 million well in the deepwater Gulf that might come up empty, or poke lots of holes in west Texas where you already know there’s oil […]

Posted On : Published By : Tom Whipple
Category:

Don’t Look to China for Oil Rebound

China continues to keep the oil bulls at bay. The country’s two biggest oil companies offered a bleak picture of demand from the world’s marginal consumer of the commodity in its latest quarterly results, out Thursday. At Sinopec, the country’s biggest refiner, officially known as China Petroleum & Chemical , SNP -1.63 % total sales of refined products in the third quarter dropped 3.4% in volume from a year before. That’s a marked change from their 5.3% rise during the first half of the year. Yet this dismal figure is bloated by Sinopec’s increasing exports of refined products, a symptom of China’s excess refining capacity. Strip those out and Sinopec’s domestic sales of gasoline, diesel and more were down 4.2% in the September quarter. At PetroChina, the nation’s second-largest refiner, product sales fell about 2% last quarter. For the past two years, China’s industrial slowdown has been hurting use […]

Posted On : Published By : Tom Whipple
Category:

Shell mulls options offshore Alaska

Despite a series of setbacks off the coast of Alaska, Shell said it’s eager to protect its leases and assets in the region. Photo courtesy of the Bureau of Safety and Environmental Enforcement THE HAGUE, Netherlands, Oct. 29 (UPI) — Despite regulatory and exploration setbacks for the arctic waters off the coast of Alaska, Royal Dutch Shell said it was keen on protecting its regional assets. The U.S. Bureau of Safety and Environmental Enforcement in August awarded Shell with one permit to start drilling an exploration well into oil-bearing zones in the Burger prospect in the arctic waters off the coast of Alaska. A federal study of the Burger prospect from 2004 described it as likely the largest reserve pool of its kind off the Alaskan coast Last month, Shell said it found evidence of oil and natural gas in its Burger exploration well, but not enough to warrant […]

Posted On : Published By : Tom Whipple
Category:

New oil production begins in Gulf of Mexico

Houston-based Noble Energy starts production from Big Bend project in the U.S. waters of the Gulf of Mexico, a region offsetting some of the decline from inland shale basins. File photo by Maryam Rahmanian/UPI HOUSTON, Oct. 29 (UPI) — The Big Bend project, a new single-well field online in the Gulf of Mexico, is on pace to reach maximum output before the end of November, Noble Energy said. Noble, a company with headquarters in Houston, said it started production from its Big Bend project in the deep waters of the Gulf of Mexico. The single-well field should be producing around 20,000 barrels of oil equivalent per day in a matter of weeks. Around 90 percent of the overall production volumes are oil. Gary Willingham, vice president of operations for Noble, said in a statement that Big Bend is among a handful of projects expected to come online for the […]

Posted On : Published By : Tom Whipple
Category:

Canada’s Suncor producing more oil

Canadian oil sands producer Suncor reports production increase from third quarter, though profits down during depressed market. Photo courtesy of Suncor CALGARY, Alberta, Oct. 29 (UPI) — Canadian oil company Suncor said production for the third quarter was up 9 percent year-on-year at a time when surplus is driving industry profits down. "Our focus on operational discipline continues to pay off," President and Chief Executive Officer Steve Williams said in a statement. Suncor, the largest energy company in Canada, reported total production for the third quarter of 566,100 barrels of oil equivalent per day, up 9 percent year-on-year, because of strong results from British output and Canadian oil sands operations. Oil sands, which accounted for the vast majority of the company’s output, increased in production by 4.5 percent from third quarter 2014. Crude oil prices are depressed in part because markets are favoring the supply side at a time […]

Posted On : Published By : Tom Whipple
Category:

Shell swings to $7.4bn loss on oil price slump and axed projects

Sign up for quick access to a wealth of global business news, including: Shell swings to $7.4bn loss on oil price slump and axed projects Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery […]

Posted On : Published By : Tom Whipple
Category:

Canadian Oil Sands Ltd. Posts Net Loss, Sharply Lower Operating Profit

CALGARY, Alberta— Canadian Oil Sands Ltd. COSWF 1.48 % , the largest stakeholder in the Syncrude oil-sands consortium, on Thursday swung to a net loss and posted a sharply lower operating profit in its latest quarter due to falling production volumes and a slump in crude oil prices. The Calgary-based company reported a net loss of 174 million Canadian dollars ($132 million), or 36 Canadian cents a share, for the three months ended Sept. 30, compared with a net profit of C$87 million, or C$0.18 a share, in the year-earlier period. It said that came partly from a C$184 million foreign exchange loss linked to U.S. dollar-denominated debt due to a weaker Canadian currency. Cash flow from operations, which is adjusted to exclude one-time items, slid 73% to C$82 million, or C$0.17 a share, down from C$302 million, or C$0.62 per share, a year ago. Canadian Oil Sands blamed […]

Posted On : Published By : Tom Whipple
Category:

Audit Finds Montana Railroad Safety Lacking as Oil Traffic Rises

HELENA, Mont.—Montana’s oversight of railroad safety falls short at a time when crude-oil train traffic from the Bakken region, already high, is only expected to increase, a new audit found. Montana has no active rail-safety plan and employs only two inspectors to cover the state, the Montana Legislative Audit Division report released Wednesday said. In addition, there is a lack of statewide emergency planning and hazardous-material response capability should an oil spill occur, the report said. That is a potentially precarious situation with a new crude-oil transfer station in North Dakota coming online that should boost oil traffic crossing Montana from about 10 trains a week to as many as 15 cars a week. About 20% of Montanans live in an evacuation zone for an oil-train derailment, which is within a half-mile of a rail line, the report said. Two of the agencies criticized in the report said they […]

Posted On : Published By : Tom Whipple
Category:

Commerce Department denied several US crude oil exchange applications: official

Several US companies have sought permission from the Obama administration to export crude oil to European, Asian, African and Latin American countries, but have been rejected because they have failed to qualify for strict exemptions to long-standing crude export restrictions, a key administration official said Thursday. These companies, many of whom sought exchanges with countries similar to a 75,000 b/d exchange announced by Mexico’s Pemex this week, were not allowed to export US crude to several other countries because they could not prove the oil could not be marketed in the US, the US Commerce Department’s Matthew Borman said during an Argus conference in Houston. US law "favors" crude exchanges, or swaps, with Canada and Mexico, but only allows swaps to other countries if certain conditions are met, said Borman, the deputy assistant secretary of commerce for export administration with Commerce’s Bureau of Industry and Security. One of these […]

Posted On : Published By : Tom Whipple
Category:

Oil Companies Curtail Spending on Everything – Except Dividends

Oil executives are standing by promises to protect dividend payouts from the collapse in crude prices even as they fire workers, cancel drilling projects and sell everything. (Bloomberg) — Oil executives are standing by promises to protect dividend payouts from the collapse in crude prices even as they fire workers, cancel drilling projects and sell everything from oil fields to aircraft to conserve cash. Exxon Mobil Corp., the world’s biggest oil explorer, declared a quarterly dividend on Wednesday that will raise the 2015 payout for the 33rd straight year. Within hours of Exxon’s announcement, Chevron Corp. disclosed a payout that will boost its annual remittance for a 28th straight year. Oil producers as diverse as Britain’s BP Plc, Norway’s Statoil ASA, and ConocoPhillips and Occidental Petroleum Corp. of the U.S. are following the same track, maintaining or lifting dividends while curtailing other sorts of investments to cope with crude […]

Posted On : Published By : Tom Whipple
Category:

Keystone Remains Locked: Elections Most Likely to Decide its Future

Years of politicking has held up construction of Keystone XL pipeline, but the political winds are shifting and the heavy crude is making its way to refineries by other means. For the last seven-plus years, TransCanada Corp. executives have racked up frequent flyer points and probably worn out several dress shoes trying to convince Americans to get onboard with their proposed Keystone XL (KXL) pipeline. Various iterations of the route have been bandied about between politicians, engineers and business leaders. Town halls have cropped up throughout the mid-continent. And harsh words have been exchanged in the news and likely in closed-door meetings. And yet almost a decade later, barrels of Canada’s heavy oil sands have made their way to the Gulf Coast by hook or by crook – or, more often by rail or by truck – and the KXL remains in limbo. Keystone had actually faded from the […]

Posted On : Published By : Tom Whipple
Category:

Marathon Oil Is First Major Shale Producer to Cut Dividend

Marathon Oil becomes the first major shale producer to cut its quarterly dividend, reducing it by 76% in an effort to prop up cash holdings as oil prices hold below $50 a barrel. (Bloomberg) — Marathon Oil Corp. became the first major shale producer to cut its quarterly dividend, reducing it by 76 percent in an effort to prop up cash holdings as oil prices hold below $50 a barrel. The move signals that oil producers’ priorities may be shifting again as the downturn drags on another year. Companies’ zeal to protect their dividends from deep cost cuts has come at the expense of growth as investment in future production was reeled back. With the prolonged market rout, even dividends won’t be invincible, said Carl Larry, head of oil and gas for Frost & Sullivan LP. “When you see major companies cutting dividends, that’s telling you things are bad,” […]

Posted On : Published By : Tom Whipple
Category:

Eni Swings to Net Loss on Low Oil Prices

MILAN— Eni E -1.19 % SpA said Thursday that it swung to a net loss in the third quarter as low oil prices reduced the profitability of the Italian company’s core oil and gas exploration business and another unit posted a large loss. The net loss in the three months to end-September was €952 million ($1.05 billion) compared with a net profit of €1.71 billion in the same period last year. Revenue declined by almost a third to €18.81 billion. Like its competitors, Eni is grappling with what industry executives and analysts say will be a sustained period of low oil prices. Brent, the global benchmark, averaged $50 a barrel in the quarter compared with double that in the same period last year. Cost cuts and a reduction in its dividend announced in March have helped Eni weather the two-thirds drop in the profitability of its oil and gas […]

Posted On : Published By : Tom Whipple
Category:

Russia Oil Production Poised for Record as Industry Defies Slump

Russian oil output is poised to break a post-Soviet record for the fourth time this year as the nation’s producers once again prove themselves resilient to a slump in crude prices. Production of crude and a light oil called condensate is on track to reach 10.77 million barrels a day in October, topping the previous month’s revised figure and setting a record for the second month running, according to Bloomberg estimates based on Energy Ministry data. Russian production has withstood a collapse in oil prices amid a global supply glut, while output in the U.S. has fallen about 5 percent from its June peak. Oil-extraction and export tax rates shrink in Russia at lower prices, giving companies a buffer against the slump, while the weaker ruble has reduced costs . “Russian oil companies are insulated from oil price corrections,” said Artem Konchin, an oil and gas analyst at Otkritie […]

Posted On : Published By : Tom Whipple
Category:

Eni: $55 per barrel oil what we need

Italian energy company Eni said it’s managed to maneuver effectively during a weakened crude oil market. File photo by num_skyman/UPI MILAN, Italy, Oct. 29 (UPI) — Italian energy company Eni said it would be able to cover its operational plans for 2015 assuming an average oil price of around $55 per barrel. Eni boasted of a strong track record , including wading into new territory in Mexico, for the third quarter and for 2015 so far. The company in October won all of the shares in three oil fields included under what the Mexican government categorized as Area 1 during a government auction. Eni said the combined reserves for the three fields are approximately 800 million barrels of oil and 480 billion cubic feet of associated gas. In August, the company announced the discovery of 30 trillion cubic feet of natural gas off the Egyptian coast, the largest discovery […]

Posted On : Published By : Tom Whipple
Category:

New European gas line inching forward

Pipeline consortium planning to send non-Russian gas to the European market says work is on pace to start construction by next year. Photo courtesy of Trans-Adriatic Pipeline AG BAAR, Switzerland, Oct. 29 (UPI) — A pipeline consortium planning to send more non-Russian gas to the European market said it was on pace to start consortium by next year. The Trans-Adriatic Pipeline consortium announced it awarded a contract to Salzgitter Mannesmann International, a leader in European steel, to provide 48-inch pipelines for the onshore sections of the planned gas artery through southern Europe. TAP is slated to transport natural gas from the second phase of the Shah Deniz natural gas field off the coast of Azerbaijan as early as 2019. BP, leading Azeri developments alongside a state-backed energy company, has awarded more than $1 billion in development contracts since selecting the TAP as its option for Shah Deniz in 2013. […]

Posted On : Published By : Tom Whipple
Category:

Norway looks for silver lining in weak oil climate

Statistics office in Norway searching for bright spots in an economy burdened by the ongoing decline in crude oil prices. File photo by A.J. Sisco/UPI OSLO, Norway, Oct. 29 (UPI) — Though lower crude oil prices continue to drag on the Norwegian economy, the government said it expects some form of recovery by late 2016. A publication from Statistics Norway said oil prices are expected to remain low, spelling trouble for an economy that relies heavily on oil and gas for export revenue. The government said the depressed industry should result in a reduction in investment volume by about 30 percent through a five-year period ending in 2018. The statistics office said mainland gross domestic product increased by less than 1 percent between the second quarter of 2014 and the second quarter of 2015. Unemployment, meanwhile, has increased by about 1 percent year-on-year. "The fall in demand from the […]

Posted On : Published By : Tom Whipple
Category:

Shell’s $7.4 Billion Loss Raises Stakes for CEO’s Big Takeover

Royal Dutch Shell Plc’s worst loss in at least 16 years has further stoked concerns about the wisdom of buying BG Group Plc. For now at least, investors are still giving Chief Executive Officer Ben Van Beurden the benefit of the doubt. Europe’s biggest oil company said it will press ahead with its largest-ever acquisition even as the worsening outlook for energy prices contributed to asset writedowns of almost $8 billion. Van Beurden said in July that BG Group’s assets including Australian natural gas plants and Brazilian oil fields would add to Shell’s cash flow with crude at $67 a barrel in 2016, a position he declined to repeat Thursday. “He’s walking a thin line — a lot of investors believe the BG deal would be dilutive for Shell at these oil prices rather than accretive,” Philip Lawlor, a strategist at Smith & Williamson Investment Management LLP in London, […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Pare Earlier Gains; Fed Rate Move Eyed

Crude-oil prices edged lower in Asia trade Thursday as traders take profits after the overnight surge on Wall Street driven by a smaller-than-expected crude stockpile growth in the U.S. However, fear of a possible interest-rate hike by the U.S. Federal Reserve at the December meeting is deterring big bets, analysts said. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $45.73 a barrel at 4:03 a.m. GMT, down $0.21 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.23 to $48.82 a barrel. “As much as market pressures could influence the Fed to hike rates, we would think this could happen as long as the U.S. economy does not deteriorate any further,” said Daniel Ang, a Phillip Futures energy analyst, adding the U.S. third-quarter growth data, scheduled for release later today, will be indicative of the Fed’s […]

Posted On : Published By : Tom Whipple
Category:

Crude oil futures hold gains after Fed sits pat on rates, inventory build

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015. Crude futures held on to strong gains in early Asian trading on Thursday, after the U.S. Federal Reserve kept rates unchanged and a weekly government report on oil stockpiles showed an inventory build that was within expectations. U.S. and global oil benchmarks were little changed, having jumped on Wednesday after the government report on inventory build reversed earlier bearish market expectations. U.S. crude futures CLc1 were down 7 cents at $45.87 a barrel at 0100 GMT. They rose more than 6 percent on Wednesday, snapping three days of losses. Brent crude LCOc1 was down 15 cents at $48.90 a barrel, after rising nearly 5 percent in the previous session. U.S. crude stocks rose last week, while gasoline and distillate inventories fell more than expected, data from the Energy Information […]

Posted On : Published By : Tom Whipple
Category:

‘Too Low’ Crude Prices Seen Rising to $80 in 2018 by Statoil

Statoil is Norway’s No. 1 oil and gas producer. Crude prices that have almost halved in the past year are unsustainable at current levels as cuts to investments and postponement of projects will lead to a decline in supply growth, according to Norway’s biggest oil company. “We think that the price level now is too low,” Eirik Waerness, chief economist and vice-president at Statoil ASA, said in an interview in Singapore on Thursday. “Some people will stop exploring for oil. With oil prices around $50, you get a stimulus for demand growth. That will tighten the market.” Crude is expected to climb to $80 a barrel in 2018 and increase gradually after that as existing supplies get used up, he said. Oil slumped more than 44 percent in the past year as U.S. stockpiles expanded at a time when OPEC producers bolstered output to retain market share, exacerbating a […]

Posted On : Published By : Tom Whipple
Category:

Iran to take a seat among world powers for Syria talks

AP Photo/Craig Ruttle Latest Syria News Iran to take a seat among world powers for Syria talks Iran to attend international talks on Syria’s future Russia pounds Syrian rebels, then reaches out to opposition Official: Iran has sent more military advisers to Syria UN: At least 120,000 displaced in Syria in past month var mytd = document.getElementById(‘mytd’); var mydiv = document.getElementById(‘spnrefmoneymarkets’); if (mytd != null) {mytd.innerHTML = spnrefmoneymarkets.innerHTML; mydiv.innerHTML = ”}; BEIRUT (AP) — Iran will take part in international talks on Syria for the first time this week, giving it a voice in the effort to find a resolution to the more than 4-year-old civil war that has so far defied even the slightest progress toward peace. A crucial backer of Syrian President Bashar Assad, Tehran has been shunned from all previous talks on Syria. Its inclusion now marks recognition by the United States that no discussion on […]

Posted On : Published By : Tom Whipple
Category:

U.N. targets thousands in vaccination drive against cholera in Iraq

The WHO said the first doses of the vaccine are expected to be administered in the next few days in response to the outbreak which has infected 2,055 people since mid-September (File Photo: AP) The World Health Organization (WHO) is launching a campaign to vaccinate 255,000 people against cholera in Iraq over the next month, in a bid to contain the country’s first major cholera outbreak since 2012, the U.N. agency said. The WHO said the first doses of the vaccine are expected to be administered in the next few days in response to the outbreak which has infected 2,055 people since mid-September. The illness, first detected in Baghdad’s western outskirts, has spread throughout the country, mainly affecting Iraqis who have been forced from their homes and Syrian refugees. The WHO said cholera has killed two people so far, although the Iraqi health ministry said last week it has […]

Posted On : Published By : Tom Whipple
Category:

New details of KRG oil deals reveal latent risks

Workers measure the pressure at the Central Processing Facility at the Tawke oil field in Iraqi Kurdistan. (SEBASTIAN MEYER/Metrography/Iraq Oil Report) When the Kurdistan Regional Government (KRG) decided to walk away from an oil deal with Baghdad, in June, it gambled that it could generate a more stable revenue stream – and help remedy a crippling financial crisis – by exporting all of its oil independently.But four months later, new details of the KRG’s independent oil exports reveal a tenuous financial situation. While the KRG Ministry of Natural Resources (MNR) has increased the region’s overall income, it is also accumulating billions … This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple
Category:

How Climate Change Is Threatening Iraq’s Fragile Security

Iraqi protesters chant slogans as they wave national flags during a demonstration against corruption in Tahrir Square in Baghdad, Iraq, Friday, October 16, 2015. In a telling exchange during the first Democratic primary presidential debate earlier this month, the candidates were asked to articulate the greatest threat to US national security. “It’s certainly the chaos in the Middle East,” answered Lincoln Chafee, the former senator and governor of Rhode Island who later dropped out of the race. Vermont Senator Bernie Sanders responded to the question by citing the “global crisis of climate change.” Whether you agree with either candidate’s assessment, it’s a mistake to talk about global conflict and climate change without highlighting how the two phenomena are inextricably linked. Extreme weather and resource scarcity exacerbated by climate change are worsening the effects of war, from the Middle East to sub-Saharan Africa, with civilians often bearing the brunt of […]

Posted On : Published By : Tom Whipple
Category:

Cholera spreading in Iraq, suspected case reported in Syria – UN health agency

WHO is mobilizing 510,000doses of oral cholera vaccine to help control the cholera outbreak among high-risk groups. Photo: UN OCHA Iraq 27 October 2015 – The World Health Organization ( WHO ) announced today that it would start vaccine treatments for cholera beginning this weekend to prevent further outbreaks in Iraq, where the disease has now been confirmed in 15 out of 18 governorates, while the agency also reported a suspected case was also found in northern Syria. WHO spokesperson Christian Lindmeier told the regular press briefing in Geneva, Switzerland, that the latest laboratory tests had confirmed 1,942 cases and two deaths in 15 out of 18 governorates in Iraq. “On 31 October, WHO will begin, in conjunction with the Ministry of Health, the oral cholera vaccine treatment, and will use 510,000 of the global stock pile to ensure that 255,000 internally displaced persons and refugees in the affected […]

Posted On : Published By : Tom Whipple
Category:

How A Lone Oil Rig Embodies the Brazil Boom That Never Was

Oil majors had big plans for Brazil, but you can’t tell by looking at the country’s offshore drilling these days. After crude was first struck in the pre-salt formation in the seas off Rio de Janeiro, producers including BP Plc and Total SA were ready to flock to Brazil with billions of dollars in investments. For the country, it appeared to augur an unprecedented era of oil bounty. Nine years later, the promise remains unrealized: Spain’s Repsol SA and China Petrochemical Corp. are the only foreigners operating an offshore drilling rig. So what happened? While the crude-price collapse and an ongoing graft probe are part of the story, Brazilian officials who failed to auction enough exploration licenses and slowed approvals with miles of red tape were also major contributors to the boom that never came to be, according to Joao Carlos de Luca, a member of the IBP lobby […]

Posted On : Published By : Tom Whipple
Category:

Pemex receives U.S. oil swap license, but for less than planned

A vehicle is seen beside fuel pumps at a Pemex gas station in Mexico City, January 13, 2015. State oil company Pemex [PEMX.UL] said on Wednesday it had received a license from the United States to import U.S. light crude in exchange for exports of Mexico’s heavier crude oil for the first time, but with a lower ceiling than originally planned. The terms of the year-long license will allow Pemex’s commercial arm, Pemex Comercio Internacional (PMI), to import U.S. light crude to process in its refineries from October, with the limit capped at 75,000 barrels per day (bpd). A Pemex spokesman said the decision to cut the original plan to import up to 100,000 barrels per day was made in accordance with the company’s present needs at its refineries. The first U.S. shipment would arrive in Mexico from the first half of November, he said. "The permit is for […]

Posted On : Published By : Tom Whipple
Category:

Poor quarterly results could push Pemex to sell valuable assets: analysts

Quarterly results reported Wednesday by Pemex could prompt the state company to offer sales or mortgages of valuable assets, including major pipelines and deepwater upstream rights, analysts said. Crude production in the third quarter stood at 2.266 million b/d, down 5.5% from 2.398 million b/d in the same period last year, Pemex said in a report to the Mexico Stock Exchange. The company registered a net loss of 167.7 billion Mexican pesos (about $10 billion), almost three times as much as the 59 billion pesos it lost in last year’s third quarter. Pemex pointed out that its crude export earnings were slashed as the price of its oil dropped to $42.75/b from $90.40/b over the period. "The results may be shocking but they hardly come as a surprise," said Arturo Carranza of the Mexico City-based Solana consultancy. "These sort of negative results have been going on for two years […]

Posted On : Published By : Tom Whipple
Category:

China confronts the pain of kicking its coal addiction

POWER PLAY | Cheap electricity, a changing climate This is part of a series exploring how the world’s hunger for cheap electricity is complicating efforts to combat climate change. A worker walks near the entrance to a coal mine in Luliang County in Shanxi, China, in May. (Adam Dean/For The Washington Post) LULIANG, China — China, the world’s biggest user of coal, is suddenly burning less of it, a change with enormous implications for the state of the atmosphere and the potential course of global climate change. The shift has been both abrupt and unexpected, bringing fresh credibility to China’s pledge to rein in its greenhouse gas emissions, now also the highest level in the world. Blamed in the West for the failure of the last global climate change talks, in Copenhagen in 2009, China is setting itself up to play a constructive role at the next round of […]

Posted On : Published By : Tom Whipple
Category:

China’s ENN in talks to secure more than 1 mil mt/year of LNG from 2018

China’s private energy company ENN Energy Holdings Ltd. is in negotiations with several LNG suppliers to secure more than 1 million mt/year of LNG over a five- to 10-year period starting from 2018, a senior company executive said Thursday. "We are talking to many sellers and would like to select the best offer," ENN Vice President Ma Shenyuan said on the sidelines of the Gastech Conference, held in Singapore October 27-30. ENN has been in discussions with several suppliers, including those with volumes from the US, he added. "I do believe [US LNG] will bring more diversity and competition to the industry." The volumes are to be delivered to ENN’s 3 million mt/year terminal project in China’s eastern Zhejiang region, which is due to commence operations in 2018. "We would like the terminal to be open to third parties from day one," Ma said. "We will be the foundation […]

Posted On : Published By : Tom Whipple
Category:

Anadarko drilling for less in U.S. shale

U.S. oil and gas company Anadarko Petroleum posts loss, but improves economics of drilling operations in U.S. shale basins. Photo courtesy of Anadarko Petroleum HOUSTON, Oct. 28 (UPI) — While taking a hefty loss for the quarter, U.S. oil and gas company Anadarko Petroleum said it was able to improve costs at operations in domestic shale basins. Anadarko reported a third quarter loss of $2.24 billion, compared with a profit of around $1.1 billion one year ago. Like its peers in the industry, the Houston-based company is struggling to generate cash at a time when crude oil is selling for about 45 percent less than it did at this time last year. "We remain committed to building and preserving value in this challenging environment," Anadarko Chairman, President and Chief Executive Officer Al Walker said in a statement. Despite the losses, the company said it was improving efficiency and productivity […]

Posted On : Published By : Tom Whipple
Category:

Oil company Hess posts fourth straight loss

Hess Corp. posts loss for the third quarter, but maintains ability to keep producing oil in a depressed market. Photo by photostock77/Shutterstock NEW YORK, Oct. 28 (UPI) — U.S.-focused oil producer Hess Corp. said it was taking a disciplined approach to its business operations after posting its fourth consecutive quarterly loss. Hess reported a net loss of $279 million for the third quarter of the year as crude oil prices, down by about 45 percent from last year, take their toll on producers. Exploration and production operations, known as the upstream sector, accounted for the bulk of the losses in the third quarter. Chief Executive Officer John Hess said spending cuts were expected from the company moving forward, but the company’s operational performance was robust in the weakened market. "We are well positioned in the current low price environment and are taking a disciplined approach to preserve our financial […]

Posted On : Published By : Tom Whipple
Category:

Canadian market forces Shell’s hand

Weak oil economy and the lack of pipeline infrastructure caused Royal Dutch Shell to shelve Canadian oil sands project. File photo by Brian Kersey/UPI CALGARY, Alberta, Oct. 28 (UPI) — An uncertain market and the lack of infrastructure needed to move Canadian oil to the global market means it’s time to scrap an Alberta oil project, Shell said. Royal Dutch Shell said it would no longer continue with the construction of its Carmon Creek project in Alberta, Canada, and take a $2 billion write down for the loss. Sanctioned in 2013, the company said it had moved in early 2015 to retool construction operations at the oil sands project, which was expected to yield 80,000 barrels of oil per day. Costs at a time of lingering market weakness and the lack of pipelines needed to move Canadian oil to the global market forced the company to reconsider its priorities. […]

Posted On : Published By : Tom Whipple
Category:

Canada Oil-Sands Giant Suncor Posts Loss

CALGARY, Alberta— Suncor Energy Inc., SU 2.89 % Canada’s largest crude-oil producer, reported a third-quarter net loss on a foreign exchange-related charge and slumping crude oil prices, setting a grim tone for the Canadian energy industry’s earnings. The Calgary company posted a net loss of 376 million Canadian dollars ($284.9 million), or 26 Canadian cents a share, in the three months ended Sept. 30. That compared with a net profit of C$919 million, or C$0.63 a share, in the same period last year. Suncor blamed a C$786 million foreign exchange loss linked to U.S. dollar denominated debt from a weakening of the Canadian currency. On an operating, or adjusted, basis that excludes one-time items, Suncor posted quarterly earnings of C$410 million, or C$0.28 a share, down nearly 69% from the C$1.31 billion, or C$0.89 a share, in the year-earlier period. That was above analysts’ average forecast of C$0.19 a […]

Posted On : Published By : Tom Whipple
Category:

Is it the Beginning of the End for the Alberta Oilsands?

A new report from Oil Change International challenges industry’s common assumption that the continued production of oilsands crude is inevitable. The report, Lockdown: The End of Growth in the Tar Sands , argues industry projections — to expand oilsands production from a current 2.1 million barrels per day to as much as 5.8 million barrels per day by 2035 — rely on high prices, public licence and a growing pipeline infrastructure — all of which are currently endangered in a carbon-constrained world. As the report’s authors find, growing opposition to oil production — especially in the oilsands, which is among the most carbon intensive oil in the world — has significantly altered public perception of pipelines, a change amplified by the cross-continental battles against the Enbridge Northern Gateway , Kinder Morgan Trans Mountain , TransCanada Energy East and TransCanada Keystone XL pipelines. According to the report’s authors, production growth […]

Posted On : Published By : Tom Whipple
Category:

Devon Cuts 200 Employees in Canada as Spending Slows in Oil Rout

Devon Energy Corp. cut 200 employees in Canada on Wednesday as it slows spending in the oil sands amid a crude price slump. The reduction of about 15 percent of the company’s employees in Canada brings the head count in the country to 1,050, Nadine Barber, a spokeswoman, said in an e-mail. “In the past two years, Devon has seen a significant reduction in capital spending in Canada as major projects, like Jackfish, have been completed,” Barber said, referring to the oil-sands drilling project it owns and operates in northern Alberta. “We expect capital to remain at lower-than-historic levels for the foreseeable future.” The Devon cuts add to about 36,000 oil and natural gas jobs lost in the country since the price crash began more than a year ago, according to an estimate this month from the Canadian Association of Petroleum Producers. Meg Energy Corp., another oil-sands developer, said […]

Posted On : Published By : Tom Whipple
Category:

France secures more LNG from United States

French energy company ENGIE, formerly GDF Suez, signs purchase agreement to secure liquefied natural gas from export terminals in the United States. File photo by Stephen Shaver/UPI PARIS, Oct. 28 (UPI) — French energy company ENGIE, formerly GDF Suez , said it signed a deal to secure liquefied natural gas from proposed export facilities in the United States. "ENGIE is committed to guarantee the supply of its European customers with clean and reliable energy," Pierre Chareyre, the company’s executive vice president in charge of LNG, said in a statement. "Importing U.S. LNG will participate to strengthen the security of supply of Europe." ENGIE said it signed a five-year sales and purchase agreement with Cheniere Marketing International to secure LNG from the planned Sabine Pass and Corpus Christi export terminals in the United States . A special permit is needed to send natural gas to companies without a U.S. free […]

Posted On : Published By : Tom Whipple
Category:

Oil majors rush cuts to hit $60 break-even

Sign up for quick access to a wealth of global business news, including: Oil majors rush cuts to hit $60 break-even Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For […]

Posted On : Published By : Tom Whipple
Category:

French day-ahead power prices up on lower nuclear output, higher demand

French day-ahead power prices climbed Wednesday as nuclear generation fell and domestic demand was forecast to rise during peak times Thursday, sources said. Baseload power for Thursday delivery was last heard before midday local time at Eur50/MWh, up Eur2.75 from Tuesday’s close of Wednesday baseload. Thursday peakload gained Eur2.50 day on day at Eur57.50/MWh. Epex Spot settled the auction for day-ahead baseload above the OTC at Eur50.71/MWh and for peakload power at Eur58.87/MWh. Article continues below… European Power Daily’s uniquely comprehensive package of news and pricing information, provides you with daily updates on new policies, projects, power deals, acquisitions, solicitations, alliances, regulatory decisions and evolving trading markets in Europe. It also produces market assessments from the UK, Germany, Switzerland, France, The Netherlands, Belgium, Spain and the Czech Republic. Temperatures Wednesday were forecast 2 degrees Celsius above the seasonal high/low of 14/7 C and seen steady Thursday, according to CustomWeather. […]

Posted On : Published By : Tom Whipple
Category:

Oil at $60 Is the Magic Number for BP in Prolonged Downturn

BP, one of the first companies to predict a prolonged price downturn, has "reset" its business to generate surplus cash flow with oil at about $60 a barrel by 2017. (Bloomberg) — For Europe’s biggest oil companies, $60 is the magic number. BP Plc, one of the first companies to predict a prolonged price downturn, has “reset” its business to generate surplus cash flow with oil at about $60 a barrel by 2017. It joins Total SA, which last month unveiled investment cutbacks and project delays that will enable it to fund dividend payouts in the same circumstances without the need to borrow. A year after oil sank into a bear market, the industry is preparing for an extended downturn, with drillers slashing investments in exploration and production by a record 20 percent this year, according to International Energy Agency. With third-quarter earnings season barely under way, producers in […]

Posted On : Published By : Tom Whipple
Category:

UK Shale Gas Industry Requires ‘Sea Change’ in Regulatory Capacity

There must be a "sea change" in the level of regulatory capacity for the UK’s shale gas sector, according to a presentation at a shale gas summit in London on Tuesday. There must be a “sea change” in the level of regulatory capacity for the UK’s shale gas industry, according to a presentation at the 6th annual Shale Gas Environmental Summit in London, organized by conference producer SMi. The presenter, who did not want to be named, stated that most of the UK’s drilling regulations relate to offshore operations due to the country’s focus on that sector. Delegates at the event, which included a range of representatives from the oil and gas sector, echoed the speaker’s comments, with one delegate stating: “If we’re drilling thousands of wells and have hundreds of pads, there has to be a…change in the level of regulatory capacity, because most of our regulation at […]

Posted On : Published By : Tom Whipple
Category:

Shell Takes $2 Billion Charge to Quit Oil-Sands Project

(Bloomberg) — Royal Dutch Shell Plc made its second major strategic change in as many months, announcing it will take a $2 billion charge as it shelves an oil-sands project in Alberta after walking away from an Arctic drilling program. Shell is halting work on the 80,000 barrel-a-day Carmon Creek drilling development after deciding the project couldn’t compete in its portfolio, the company said in a statement Tuesday. The charge will be recorded in third-quarter earnings results, which are due to be released Thursday. Energy producers are canceling or delaying projects as a crude price slump forces them to prioritize spending. The company last month abandoned drilling offshore Alaska indefinitely after it failed to find enough oil or gas in the Chukchi Sea. Earlier this year, Shell withdrew an application to develop the Pierre River oil-sands mine in northern Alberta. “We are making changes to Shell’s portfolio mix by […]

Posted On : Published By : Tom Whipple
Category:

Shell Makes Biggest Net Loss in at Least a Decade on Price Slump

Royal Dutch Shell Plc reported its biggest net loss in at least a decade as it wrote down the value of assets and lowered its oil-price expectations. The company, which is buying BG Group Plc in the industry’s largest deal this year, reported a third-quarter net loss of $7.42 billion, compared with a profit of $4.46 billion a year earlier. It took charges totaling $7.89 billion following its withdrawal from Alaskan offshore exploration and a Canadian oil-sands project. Profit adjusted for one-time items and inventory changes dropped 70 percent to $1.8 billion, The Hague-based Shell said Thursday in a statement. That missed the $2.92 billion average estimate of 17 analysts surveyed by Bloomberg. Europe’s biggest oil producer has cut jobs and reduced spending this year as Chief Executive Officer Ben Van Beurden prepares the company for prolonged market stagnation. Crude’s decline in the past 16 months has been brutal […]

Posted On : Published By : Tom Whipple
Category:

Eni Reports Third-Quarter Loss After Crude-Oil Prices Slide

Eni SpA, Italy’s largest oil producer, reported a net loss in the third quarter after crude prices slumped. The adjusted net loss was 257 million euros ($281 million) compared with net income of 1.17 billion euros a year earlier, the Rome-based company said Thursday in a statement. “The fundamentals of the oil market remain weak due to oversupplied global markets and uncertainties about the resilience of demand,” Eni said, announcing a reduction in its annual spending plan. The shares fell as much as 1.6 percent in Milan. The price of Brent crude, a global benchmark, has tumbled about 45 percent in the past year amid a persistent glut. Eni and its peers have been forced to cut spending, sell assets and cancel projects to weather a decline in earnings, which has been partly offset by higher margins from oil refining. The Italian company, which operates five processing plants in […]

Posted On : Published By : Tom Whipple
Category:

Low Oil Prices Take a Toll on Royal Dutch Shell in Quarter

Photo A Royal Dutch shell drilling unit arriving in Port Angeles, Wash., earlier this year, intended for use in the Arctic. The company has cut back on its exploration efforts in the Alaskan Arctic and taken billions of dollars in write-offs. Credit Daniella Beccaria/seattlepi.com, via Associated Press LONDON — Lower petroleum prices took a big toll on Royal Dutch Shell in the third quarter. The company reported a loss of $7.4 billion, compared with a profit of $4.5 billion in the quarter a year earlier. Adjusted for inventory changes and one-time items — a more closely watched measurement — earnings fell 70 percent to $1.8 billion. The company took about $7.9 billion in write-offs for its recently halted exploration venture off Alaska, a canceled heavy- oil project in Canada and other operations. The financial results for the company, based in The Hague, come as the oil industry is grappling […]

Posted On : Published By : Tom Whipple