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Petrofac Plunges After Cutting Earnings Forecast on Delays

Petrofac Ltd. (PFC) fell by the most in more than five years in London trading after saying earnings will be lower than expected because of project delays. The U.K.’s largest oil and gas engineer will cut capital spending at its Integrated Energy Services division, which takes direct stakes in fields, after reviewing the future of the business. The stock fell as much as 18 percent to 1,142 pence, the largest drop since October 2008. It traded at 1,165 pence at 9:55 a.m. London time, making it the biggest decliner in the benchmark FTSE 100 index. Today is the second time in six months Petrofac shares have plunged because of a profit warning. The stock fell by a record in November after the company forecast flat to modest profit growth in 2014. Profit for the year is now expected from $580 million to $600 million, London-based Petrofac said today in […]

Posted On : Published By : Tom Whipple
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Europe Must Embrace Fracking, U.K. Energy Minister Says

The Ukraine crisis has become a “wake-up call” for European governments on the need to develop local energy resources, including natural gas from shale, U.K. Energy Minister said. The use of hydraulic fracturing, or fracking, to tap shale reserves that could meet demand for decades would provide greater security of supply at a time when Russia has threatened to curb gas shipments needed to power European economies, he said in an interview in Houston yesterday. “We have to ensure that we do maximize our indigenous resources,” Fallon said. “We can’t be reliant on dodgy parts of the world.” Escalating violence in Ukraine fanned by Russian separatists has intensified calls to develop local prospects, especially in countries such as Bulgaria that are more reliant on Russian gas, he said. Russia provides about a third of the EU’s oil and gas needs, mainly via state-controlled OAO Gazprom (GAZP) and OAO Rosneft […]

Posted On : Published By : Tom Whipple
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Balcombe oil plans spark outrage

The British Friends of the Earth said they were frustrated with council members in West Sussex County who voted in favor of oil operations near Balcombe. "We are extremely disappointed that councilors have not listened to local people," Friends of the Earth campaigner Brenda Pollack said in a statement Tuesday. "This is an attempt by Cuadrilla to set the wheels in motion for dirty fossil fuel extraction." Last week, Cuadrilla Resources said it would apply for permission to drill up to four exploration wells at sites near Balcombe. The village was the scene of demonstrations against the controversial drilling practice, hydraulic fracturing. While last year’s campaign didn’t involve hydraulic fracturing, the company said it now wanted approval to employ the technique. Pollack said that, instead of fossil fuels, the British economy should embrace more renewable forms of energy. The council heard public reaction to […]

Posted On : Published By : Tom Whipple
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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
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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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Fracking Is the Future

Fracking is the future according to Lord John Browne, the former chief executive for BP. He is known as the fracking czar due to his enthusiasm to bring the process to Great Britain. Hydraulic fracturing, known as fracking, uses a combination of water, sand, and chemicals to separate shale from natural gas and oil. Lord Browne wants to take fracking to a new level in Great Britain. According to the British Geological Survey, the Bowland-Hodder formation in England’s midsection contains shale deposits with more than 1,300 trillion cubic meters. Within that shale are deposits of oil and natural gas. With fracking, Great Britain will have enough oil and natural gas for 40 years. He believes fracking is a secure domestic energy source that will create a plethora of new jobs and generate billions in tax revenue. Lord Browne considers fracking a better alternative to constructing nuclear plants and importing […]

Posted On : Published By : Tom Whipple
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Dude, where’s my North Sea oil money?

For a few years, the UK enjoyed a once-in-a-lifetime windfall – only, unlike the Norwegians, we’ve got almost nothing to show for it Last Wednesday, every single Norwegian became a millionaire – without having to lift a lillefinger. They owe the windfall to their coastline, and a huge dollop of good sense. Since 1990, Norway has been squirreling away its cash from North Sea oil and gas into a rainy-day fund. It’s now big enough to see Noah through all 40 of those drizzly days and nights. Last week, the balance hit a million krone for everyone in Norway. Norwegians can’t take a hammer to the piggy bank, amassed strictly to provide for future generations. And converted into pounds, the 5.11 trillion krone becomes a mere £100,000 for every man, woman and child. Still, the oljefondet (the government pension fund of Norway) owns over 1% of the world’s stocks, […]

Posted On : Published By : ASPO-USA
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Light Goes Out on U.K. Coal Industry

The U.K. coal industry is at the point of fizzling out following the planned closure of two of its three remaining deep mines in northern England. Among the beneficiaries: Russian exporters of the commodity. U.K. production of coal—still a major source of power in the country—has been in long-term decline since Margaret Thatcher ‘s government defeated a miners strike in the 1980s. When Mrs. Thatcher came to power in 1979, Britain produced 122 million tons of coal from 219 underground and 58 open-cast mines. Last year production was one-tenth that amount, the lowest to date. A further drop when the closures are completed in 18 months will underline how reliant the U.K. has become on foreign suppliers. Since 2002, annual imports of coal used in U.K. power generation have doubled. The country now imports nearly four times as much coal as it produces domestically. Problems for the U.K. coal […]

Posted On : Published By : Tom Whipple
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Freedom to frack plan set to spark UK backlash

Energy companies are to be given the freedom to “ frack ” for shale gas under private land in a move that is set to provoke a backlash from environmentalists, residents and some MPs. In an attempt to kick-start the fledgling shale industry, the coalition will include an infrastructure bill in the Queen’s Speech to change trespass laws, allowing companies to drill without permission in return for only minimal compensation to landowners. The bill will also give new freedoms to the Highways Agency in an attempt to get more major roads built, as well as planning reforms designed to fast-track new developments. The legislation, expected in the Queen’s Speech on June 3, comes as David Cameron and George Osborne prepare to defend the coalition’s mixed record on transforming Britain’s ageing infrastructure. The prime minister and chancellor will announce on Tuesday that 200 projects worth £36bn will start construction in […]

Posted On : Published By : Tom Whipple
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British shale sector not in prime time

A British government report on the shale oil and natural gas sector suggests the infrastructure and labor pool isn’t yet in place for full utilization.The British Geological Survey last year estimated the Bowland shale formation in the north of the country contains 1.3 quadrillion cubic feet of natural gas. The government says shale could ensure energy security for a country where net natural gas imports are on pace to increase from 45 percent of demand in 2011 to 76 percent by 2030. A report from BGS, which the Sunday Telegraph says is expected later this week, may suggest shale could provide a source of major economic stimulus, though the nation’s energy sector lacks the workforce and the equipment to adequately develop the reserves. British energy companies Cuadrilla Resources and IGas are frontiers in shale development in the country. Sam Laidlaw, chief executive officer at […]

Posted On : Published By : Tom Whipple