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Shell Profit Sinks as Weak Refining Adds to Output Losses

Royal Dutch Shell Plc (RDSA) said profit plunged because of deteriorating refining markets and mounting losses in the Americas, surprising investors with an early earnings report that wiped out $10 billion in shareholder value. Europe’s biggest oil company, in its first profit warning since 2004, said adjusted earnings excluding one-time items and inventory changes were about $2.9 billion in the fourth quarter. That compares with $4.5 billion in the previous three months and an average fourth-quarter analyst estimate of $4.9 billion. “It’s a shock,” Jason Kenney, an analyst at Banco Santander SA in Edinburgh, said today by telephone. Shell had “to pre-announce to get the market to reality, but even so it’s a very weak set of results.” Shell fell as much as 4.4 percent in London trading, the most since Oct. 31, and was down 2.9 percent at 2,130.5 pence as of 8:53 a.m. local time. Chief Executive […]

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Royal Dutch Shell Issues Profit Warning

LONDON— Royal Dutch Shell Rn PLC warned Friday that fourth-quarter profit would be significantly weaker than recent levels partly because of higher exploration costs and lower oil and gas volumes. The company also cited weaker industry conditions in downstream oil products for the weaker performance. The oil major expects to post fourth-quarter earnings of $2.2 billion 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 […]

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Shell blames high refining costs for warning

Royal Dutch Shell blamed continuing woes in refining, fuel theft in Nigeria and higher exploration costs for its first profit warning in 10 years. The company said fourth-quarter earnings would be “significantly lower” than last year in the first update under new chief executive Ben van Beurden, who took over as chief executive from Peter Voser at the beginning of the year. Shell said it would take a $700m charge related to its exploration and production activities and added that its upstream American business, which has been hurt by falling natural gas prices, would continue to make a loss. It also said that its downstream earnings in the fourth quarter of last year had been hit by “significantly weaker” industry refining conditions, in particular in Asia-Pacific and Europe. Shares in the company, which fell 3.3 per cent to £21.19 in early trading, have underperformed the European […]

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The Primary Energy Tale of Two Continents

UK Secretary of State for Energy and Climate Change, Ed Davey, is worried about rising energy costs in Europe whilst energy costs in N America are going in the opposite direction. But he doesn’t seem to understand the root cause of the situation or how to tackle the problem. Primary energy production peaked in Europe in 1996 at 1138 million tonnes oil (mmtoe) equivalent and has since fallen to 970 mmtoe in 2012. That is a drop of 15% (Figure 1) In N America, primary energy production hit a new peak in 2012 of 2512 million tonnes oil equivalent. That is up 8.5% since 1996 (Figure 1) Rising energy production in N America and falling Energy production in Europe lies at the heart of energy prices trading in opposite directions on either side of The Atlantic. Europe has a population of ~ 739 million who produce 1.31 tonnes oil […]

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U.K. to Pay Up To $3M a Well to Councils Allowing Shale Gas

Prime Minister David Cameron will give millions of pounds to local authorities that allow shale gas developments to go ahead, part of a drive to create more jobs and encourage investment in the U.K. Councils will be allowed to keep 100 percent of the business rates they collect from shale gas sites, double the current 50 percent figure, in a move that may be worth 1.7 million pounds ($2.8 million) per site in central government funding per year, according to figures released by Cameron’s office. Business rates are taxes to help pay for local services, charged on most non-domestic properties. “That’s going to be quite a significant boost for that local council’s coffers,” Business Minister Michael Fallon told the BBC . “We want local councils and local people to benefit from this exploration. We expect 20-40 wells to be drilled in exploration over the next couple of years.” Research […]

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France's Total enters UK shale gas market through license buys

France’s Total has bought a 40% interest in two shale gas exploration licenses in the UK, the company said Monday, confirming reports over the weekend. The deal marks Total’s entrance into the UK shale gas exploration market, and the licenses 139 and 140 are situated in Gainsborough Trough, East Midlands. The licenses lie on the Bowland Shale region and span a total of 240 square kilometers. Total and fellow French company GDF Suez have both looked to strengthen their shale gas expertise abroad after France banned shale gas exploration using hydraulic fracturing in 2011. GDF Suez announced in October that it had bought stakes in 13 UK shale gas licenses from Dart energy, also in the Bowland Shale region. The transaction announced by Total Monday is a farm-in deal and partners in the licenses will include GP Energy Limited, a subsidiary of Dart Energy […]

Posted On : Published By : Tom Whipple
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France’s Total enters UK shale gas market through license buys

France’s Total has bought a 40% interest in two shale gas exploration licenses in the UK, the company said Monday, confirming reports over the weekend. The deal marks Total’s entrance into the UK shale gas exploration market, and the licenses 139 and 140 are situated in Gainsborough Trough, East Midlands. The licenses lie on the Bowland Shale region and span a total of 240 square kilometers. Total and fellow French company GDF Suez have both looked to strengthen their shale gas expertise abroad after France banned shale gas exploration using hydraulic fracturing in 2011. GDF Suez announced in October that it had bought stakes in 13 UK shale gas licenses from Dart energy, also in the Bowland Shale region. The transaction announced by Total Monday is a farm-in deal and partners in the licenses will include GP Energy Limited, a subsidiary of Dart Energy […]

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Total joins UK’s pursuit of shale boom

Cuadrilla Shale Fracking Plant Total of France is to become the first major oil company to explore for shale gas in the UK, in a big boost for government efforts to create a US-style fracking boom on British soil . The deal, to be announced on Monday, will be seen as a big vote of confidence in the UK’s fledgling shale industry. The coalition has made the exploitation of Britain’s unconventional gas reserves a top priority, offering tax breaks to shale developers and promising big benefits to communities that host shale drillers. Total will announce on Monday a deal to join a shale gas exploration licence in the Midlands currently operated by Ecorp of the US, according to people familiar with the matter. The other partners in the project are Dart Energy and UK-listed Igas and Egdon Resources . George Osborne, chancellor, has argued that shale has “huge potential” […]

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UK storms: 'Colossal waves' set to batter coastal areas

New warnings comes after areas like Porthcawl, south Wales, were battered with waves on Sunday "Colossal waves" whipped up by winds of up to 70mph are likely to cause more flooding as some coastal areas take another battering, forecasters warn. Western and southern areas are likely to bear the brunt, where flooding could be worse than that seen in recent days. More than 100 flood warnings, meaning "flooding is expected", are in place in England, Scotland and Wales. A severe flood warning , meaning "danger to life", is in place for the Lower Stour in Dorset. BBC forecaster John Hammond said there was no good news for exposed places around southern and western coasts where there would be "colossal waves". "Add on top of that high spring tides again – and very, very strong winds of up to […]

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UK storms: ‘Colossal waves’ set to batter coastal areas

New warnings comes after areas like Porthcawl, south Wales, were battered with waves on Sunday "Colossal waves" whipped up by winds of up to 70mph are likely to cause more flooding as some coastal areas take another battering, forecasters warn. Western and southern areas are likely to bear the brunt, where flooding could be worse than that seen in recent days. More than 100 flood warnings, meaning "flooding is expected", are in place in England, Scotland and Wales. A severe flood warning , meaning "danger to life", is in place for the Lower Stour in Dorset. BBC forecaster John Hammond said there was no good news for exposed places around southern and western coasts where there would be "colossal waves". "Add on top of that high spring tides again – and very, very strong winds of up to […]

Posted On : Published By : Tom Whipple