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Bank of England gauges impact of lower oil prices

Bank of England offers measured take on impact of lower crude oil prices, but notes inflation is below a level considered to be healthy. File Photo by Hugo Philpott/UPI LONDON, Nov. 10 (UPI) — With about 60 percent of the drop in crude oil prices linked to demand issues, the Bank of England suggested pressure may be negative for the British economy. Lower crude oil prices have translated to a de facto form of stimulus to consumers and consuming nations, but left exporters struggling to cope with weakened economies. The Canadian economy most recently said it was flirting with recession. In September, the Russian Central Bank warned of a prolonged slump in crude oil prices and said there were "persistent risks of considerable economic cooling" in Russia. The Bank of England said in a November report on inflation there were key market factors to gauge when determining the risks […]

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UK wholesale natural gas prices fall on solid supply, mild weather forecasts

UK wholesale natural gas prices fell at the open Monday because the UK gas system was well supplied due to high LNG sendout combined with robust Norwegian gas imports and demand dampened by mild weather. National Grid 10:00 am local time demand forecasts for Monday were 241 million cu m with physical flows seen at 244 million cu m/d. Both the within-day and day-ahead NBP contracts dropped below 35 pence/therm in early Monday trading and were seen at 34.90 p/th and 34.85 p/th respectively, down 0.325 p/th and 0.25 p/th from the Friday assessments. LNG sendout from the South Hook LNG terminal ramped up at the beginning of Monday’s gas day after having fallen over the weekend and been low on Friday due to an unplanned outage — flow rates were seen at 33 million cu m/d Monday morning. Article continues below… European Gas Daily is a flagship Platts […]

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Oil Slump Pits U.K. Carrots Against Norwegian Stick in North Sea

The Oseberg A offshore gas platform operated by Statoil ASA stands in the Oseberg North Sea oil field 140kms from Bergen, Norway. Faced with the collapse in oil prices, the two dominant North Sea producers are taking opposite approaches to bolster dwindling investment: The U.K. is offering carrots, while Norway is wielding a stick. Britain plans to extend the 1.3 billion pounds ($2 billion) of tax cuts granted to producers in March after more than one in three fields was rendered uneconomic by the slump in crude. In contrast, Norway has shunned incentives and warned companies that scrapping projects could hurt their chances of getting new Arctic licenses. The differing strategies highlight the divide between depleted British waters and the untapped potential and larger reserves on the Norwegian side of the North Sea. Norway can afford to be uncompromising, while the U.K. struggles to extend the life of aging […]

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Costs bear down on venerable Shetland oil industry

The North Sea oil industry, particularly the Shetland region at its core, is showing the strain of low oil prices, raising questions about its viability. The demise of the four-decade old UK industry has been predicted many times, with recent concerns centered on taxation and possible independence for Scotland. After oil prices collapsed last year, lobby group Oil and Gas UK predicted 20% of UK oil production could be shut down this year. Instead, only a few fields have been shut and oil production is booming, rising 14% year on year to a million barrels per day in the second quarter. Investment reached a record GBP14.8 billion ($23 billion) last year, Oil and Gas UK now says. But the reality of oil prices halving, and staying that way, is hurting. That companies have hesitated to decommission aging facilities is perhaps unsurprising. Dismantling the offshore structures of a past era, […]

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Shell Reorganizes as it Plans for ‘Prolonged Downturn’

Shell reorganizes its upstream operation as it plans for a prolonged downturn due to low oil prices Royal Dutch Shell plc said Tuesday it is planning for a prolonged downturn due to low oil prices as the firm announced a reorganization of its upstream operation would increase accountability for performance and align the company to deliver on its strategy. In a statement to coincide with the firm’s ‘management day’, Shell said that both its net investment and dividend payments have been covered by operating cash flow in the year to the end of the third quarter of 2015 – a period during which oil prices averaged $60 per barrel. Shell highlighted cost cutting that has seen a 10-percent reduction in operating costs and a 20-percent reduction in capital spending during 2015, together amounting to $11 billion. The firm’s drive to reduce costs and simplify its business has led to […]

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Shell starts November with asset sales

Royal Dutch Shell announces divestment from Chinese and French markets after reporting weak results for the third quarter. File photo by Brian Kersey/UPI THE HAGUE, Netherlands, Nov. 2 (UPI) — After reporting heavy losses for the third quarter, Royal Dutch Shell said Monday it sold off stakes in Chinese and French holdings in the downstream sector. For $510 million, Shell said it sold off its liquefied petroleum gas business in France to rival DCC Energy. The divestment includes the staff from business entity Butagaz and the brand. In China, for a confidential sum, the Dutch supermajor said it sold a 75 percent stake in a lubricants division to Chinese investment firm Huo’s Group and U.S.-based multinational investor The Carlyle Group. "Both divestments are consistent with Shell’s strategy to concentrate its downstream footprint on assets and markets where it can be most competitive, and to divest its LPG businesses worldwide," […]

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Shell Steams Ahead With BG Takeover With Promise of More Savings

Royal Dutch Shell Plc said its record takeover of BG Group Plc will still deliver value to investors even in a prolonged oil-industry downturn and reshaped its business in preparation for the acquisition. Europe’s biggest oil company will save an addition $1 billion in operating costs from the combination with BG, bringing the total estimate of synergies from the deal to $3.5 billion, Shell said in a statement on Tuesday. The takeover will still add to the company’s earnings per share and cash flow from operations even after the outlook for Brent crude prices to 2018 dropped by $10 to $15 a barrel since the deal was announced in April. Oil’s renewed slump to a six-year low in August prompted some investors to question the logic of the acquisition, valued at $70 billion when it was announced. Shell expects the deal to expand its access to oil reserves in […]

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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 […]

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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, […]

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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 […]

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