Category: United Kingdom

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 […]

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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 […]

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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 […]

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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 […]

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LONDON— BP BP -1.88 % PLC on Tuesday laid out plans to cope with an extended period of low oil prices that anticipate crude at $60 a barrel in 2017 as it reported third-quarter earnings that nearly halved compared with a year earlier. The oil industry has been buffeted over the last 16 months by a sharp slump in oil prices. The third quarter was particularly brutal as the price of international benchmark Brent crude dropped to around $50 a barrel, its lowest level since the financial crisis and roughly half its level during the same period last year. Brent traded at about $47 a barrel on Tuesday. BP has already announced plans to cut spending and reduce costs this year in preparation for a sustained period of low prices, but on Tuesday gave the first indication of its longer term plans and price expectations. Shares in BP rose […]

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BP announced on Tuesday a third round of spending cuts and more asset sales in the coming years to tackle an extended period of low oil prices after third-quarter profits Continue Reading

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Consultant Roland Berger discusses whether cost cutting today is removing the ability of oilfield services companies to capitalize on the opportunities of tomorrow? This time last year, oil prices were at $95 per barrel and had been averaging around that level since 2011. Twelve months on, the factors that caused the initial price drop – such as unconventional reserves in North America and OPEC’s unwillingness to reduce production – show no signs of abating and have been re-enforced or supplanted by new ones as China’s demand slows and sanctions are lifted in Iran. As a consequence, the price of oil dropped again in September to $48 per barrel and it is clear that what was originally thought to be a short-term phenomenon is looking increasingly more medium, if not, long term. In this environment, capital expenditure budgets for exploration have been significantly scaled back and North Sea operators are […]

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Low-carbon, renewable energy sources are unlikely to replace the role of fossil fuels any time soon meaning the key value of oil companies’ proven reserves are not under threat from growing concerns over climate change, Shell chief executive Ben van Beurden said Tuesday. In an apparent reply to recent concerns voiced by the head of the UK’s central bank over the risks of stranded oil industry assets due to rising climate fears, van Beurden said alternatives to fossil fuels are still a long way from replacing conventional fuel sources for the world’s biggest energy consuming sectors. "I know that some people would like fossil fuels to be replaced by renewables as we speak. But for technical and economic reasons, this can only happen step by step," van Beurden told the Oil & Money conference in London. Bank of England Governor Mark Carney last week said investors should be cautious […]

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