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Shell cuts 2015 capex, sees downstream downturn

* Capex reduced by more than $2 billion * Decision on Majnoon development pushed back to 2017 * CFO says refining margins already worsening Shell said Thursday it had reduced its expected 2015 capital expenditure to $33 billion from previous guidance of a little more than $35 billion as the company continues to adjust its business to the lower oil-price environment. Shell, releasing its first-quarter results, also said it continued to reduce its operating costs and capital spending, with Q1 operating expenditure down by $1.1 billion year on year. Speaking to reporters on a conference call, CFO Simon Henry said the capex this year would be $33 billion, or "potentially less," a reduction of at least $2 billion compared with guidance given by Shell three months ago. Article continues below… Platts 8th Annual Global Crude Oil Summit sets a unique global agenda, inviting industry leaders to share views on […]

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BP unwinding oil storage play as contango narrows

LONDON (Reuters) – Oil major BP said it will gradually sell throughout 2015 more than $1.25 billion of oil it had stored earlier this year to seize on a futures market structure to boost profit. Traders including BP bought and stored oil throughout late 2014 and early 2015 after an oil price collapse as prompt prices dropped below those for further into the future, a market structure known as contango. Traders have been profiting from the contango by storing crude in the hope of reselling it at a profit at a later date or by simply locking gains via paper trading. Chief Financial Officer Brian Gilvary said BP’s trading unit had performed much better than in an average quarter, likening the quarter to a strong trading performance in early 2009 when crude prices last crashed. "The profit we booked in one quarter for contango is relatively modest, in the […]

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BP signals start of new North Sea campaign

British energy company BP starts drilling in deep waters west of Shetland Islands, part of a seven-year commitment to regional developments. (UPI/Shutterstock/James Jones Jr.) LONDON, April 29 (UPI) — British energy company BP said Wednesday it was marking the start of a campaign west of the Shetland Islands with deepwater drilling in the Loyal oil field. BP is working as the operator at the Loyal field on behalf of its partners at Royal Dutch Shell and Austrian energy company OMV using the Deepsea Aberdeen rig. BP President for North Sea operations Trevor Garlick said the start of drilling marks an "important milestone" for regional operations . The British company said five wells are planned in the area. First oil is expected by the end of 2016 and will be moved to a new floating, production, storage and offload vessel. BP, which has been the focus of potential takeover rumors […]

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UK warns off BP suitors now Shell unavailable as ‘white knight’

LONDON (Reuters) – Britain’s warning to potential suitors of BP is a sign of the oil major’s vulnerability to a takeover bid and that a more politically palatable tie-up with Royal Dutch Shell no longer seems to be an option, banking and industry sources said. Despite championing a laissez-faire policy towards takeover deals, Britain has always had a special interest in BP, dating back to the creation of the company via an unusual government investment master-minded by Winston Churchill. But in the past when the company has looked vulnerable, there was always the prospect that Anglo-British peer Shell could act as a "white knight" and agree to a merger deal that would preserve British interests. With Shell now tied up with a $70 billion takeover of BG, that seems much less likely, prompting the outgoing British government to break cover and say it would oppose any bid for BP. […]

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BP Reports Fall in First-Quarter Profit Amid Weaker Oil Prices

ENLARGE A section of the BP Eastern Trough Area Project (ETAP) oil platform is seen in the North Sea, around 100 miles east of Aberdeen, Scotland. BP reported a fall in first-quarter profit on Tuesday. Photo: Reuters LONDON— BP PLC on Tuesday reported a fall in first-quarter profit from a year earlier, giving the first glimpse of how low oil prices through the beginning of 2015 affected the world’s biggest oil companies. BP’s replacement-cost profit—a number similar to the net income that U.S. oil companies report—was $2.1 billion, down from $3.48 billion a year earlier. Revenue fell to $54.9 billion from $75.1 billion from a year earlier. Production for the quarter was 8.3% higher than the first quarter of 2014 at 2.31 billion barrels of oil equivalent a day. “Looking ahead, we expect second-quarter 2015 reported production to be lower than the first quarter, reflecting significant seasonal turnaround and […]

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U.K. Tells BP it Would Oppose Foreign Takeover of the Company

ENLARGE The U.K. government told BP it would intervene to prevent any foreign takeover of the oil company. Photo: NICK ANSELL/ZUMA PRESS LONDON—The U.K. government told BP PLC that it would oppose any potential foreign takeover of the company because it wants the oil giant to remain a British company with global clout. With a market cap of more than $132 billion, BP would be a huge takeover target—and a big bite for even its largest rivals. But amid today’s low oil prices, speculation has swirled over possible deal making. Earlier this month, Royal Dutch Shell PLC reached a deal to buy UK-based BG Group PLC for some $70 billion. A British government official said Sunday that the U.K. government told BP it would intervene to prevent any foreign takeover bid of BP, one of the world’s biggest oil companies. It would also seek to prevent a takeover from […]

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British shale decisions delayed

Local council in United Kingdom delays decisions on fledgling shale gas campaign until June. File Photo by UPI/Gary C. Caskey. PRESTON, England, April 24 (UPI) — A local council at the center of a fledgling shale natural gas program in the United Kingdom said it needed more time to review planning applications. Cuadrilla Resources estimates there may be as much as 200 trillion cubic feet of shale natural gas in Lancashire. The Lancashire County Council recommended rejecting the companies’ drilling applications, though Caudrilla in January was given more time to address concerns about noise pollution and traffic in the area. The county council said it opted to move the decision on operations at two sites in the region to June 30. "The extension follows a request by Cuadrilla to consider additional information about the applications," the council said in a Thursday statement. An initial decision was expected by April […]

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Gatwick oil explorer clarifies claim over recoverable reserves

Gatwick has promised to ‘bear all the main risks’ of an expansion programme The tiny oil and gas explorer which last week claimed to have found a world class oilfield near Gatwick airport has clarified its expectations of the deposit, saying the hydrocarbons cannot yet be considered prospective. UK Oil & Gas Investments on April 9 said it had discovered a “world-class potential resource” after drilling into the Weald Basin at Horse Hill in Surrey and finding 158m barrels of oil per square mile. David Lenigas , chairman of UKOG, said last week the whole basin could contain “multiple billion barrels”. But on Wednesday, UKOG said in a statement that the oil in place “should not be considered as either contingent or prospective resources or reserves”. Contingent resources are those considered potentially recoverable but not yet mature enough for commercial development. “Further development work in the form of appraisal […]

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