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Suncor Chief Busts Oil-Sands Cost Paradigm in Hunt for Deals

PlayCurrent Time 0:00/Duration Time 0:00Remaining Time -0:00Stream TypeLIVELoaded: 0%Progress: 0%00:00Fullscreen00:00MutePlayback Rate1Subtitles subtitles off Captions captions settings captions off Chapters Chapters No compatible source was found for this video.Foreground—WhiteBlackRedGreenBlueYellowMagentaCyan—OpaqueSemi-OpaqueBackground—WhiteBlackRedGreenBlueYellowMagentaCyan—OpaqueSemi-TransparentTransparentWindow—WhiteBlackRedGreenBlueYellowMagentaCyan—OpaqueSemi-TransparentTransparentFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyDefaultMonospace SerifProportional SerifMonospace Sans-SerifProportional Sans-SerifCasualScriptSmall CapsDefaultsDonexShare & EmbedCopy CodeAdvertisement Suncor CEO on Merger and Acquisition Opportunities Suncor Chief Executive Officer Steven Williams is seeking more assets in Canada’s beaten-down oil sands, saying he’s cracked the code for making money in the notoriously costly region. The country’s largest crude producer is seeking to take advantage of an industry downturn to get even bigger. As competitors struggle or walk away from bitumen production in northern Alberta because of a 60 percent slide in crude prices since June of last year, Suncor is ready to step in, Williams said. “We’re starting to bust this paradigm of Canadian oil sands being expensive,” Williams said before an interview on Bloomberg TV Canada in […]

Posted On : Published By : Tom Whipple
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Investor Shift: Hate the Oil, Love the Big Oil Company

Investors remain downbeat on oil, but some are starting to buy the companies that pump it out of the ground. Since the beginning of October, Brent, the global oil benchmark, has fallen by 8% and few see it recovering much this or next year. But oil and gas stocks are up almost 8%, as measured by the S&P Global Oil Index. The renewed interest in this beleaguered sector has little to do with more optimistic views on crude. It reflects the industry’s attempts to adjust to the lower oil price by cutting expenditure, divesting businesses and squeezing suppliers for better deals. To be sure, not all investors are keen and many oil companies continue to post large losses while cutting the budgets that could lead to future growth. But increasingly, some large money managers are betting these companies are on their way to becoming more profitable investments. Oil has […]

Posted On : Published By : Tom Whipple
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Suncor Plans Higher Spending of Up to $5.5 Billion Next Year

Suncor Energy Inc., Canada’s largest crude producer, plans to boost capital spending to as much as C$7.3 billion ($5.5 billion) next year to expand operations and increase efficiency. The investment would be an increase from about C$6.3 billion this year, the average of 14 analysts’ estimates compiled by Bloomberg. The program is flexible, within a range starting at C$6.7 billion, to respond quickly to any further deterioration in market conditions, Suncor said Tuesday. Both capital and operating expenditures can be scaled back. Suncor has announced 1,000 job cuts, lowered its 2015 capital budget by $1 billion and delayed projects to weather collapsing prices. The company, along with Canadian Natural Resources Ltd., Cenovus Energy Inc. and other competitors, has squeezed spending in the oil sands, one of the world’s most expensive reserves to develop. “We’re well-positioned to invest in our base business and growth projects, even in a lower for […]

Posted On : Published By : Tom Whipple
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Oil Theft Soars as Downturn Casts U.S. Roughnecks Out of Work

The moon was a waning crescent sliver Sept. 9 when a man emerged from an oil tanker, sidled up to a well outside Cotulla, Texas, and siphoned off almost 200 barrels. Then, he drove two hours to a town where he sold his load on the black market for $10 a barrel, about a quarter of what West Texas Intermediate currently fetches. “This is like a drug organization,” said Mike Peters, global security manager of San Antonio-based Lewis Energy Group, who recounted the heist at a Texas legislative hearing. “You’ve got your mules that go out to steal the oil in trucks, you’ve got the next level of organization that’s actually taking the oil in, and you’ve got a gathering site — it’s always a criminal organization that’s involved with this.” From raw crude sucked from wells to expensive machinery that disappears out the back door, drillers from Texas […]

Posted On : Published By : Tom Whipple
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An “oil theologist” is needed to interpret the given resources and reserves in World Energy Outlook 2015

This year’s big news regarding the reporting of oil reserves in World Energy Outlook 2015 is that this annual report now discusses “resources that are technically possible to produce” and what proportion of these are proven reserves. When I was working on Chapter 17, The Peak of the Oil Age for my new book a few weeks ago I discussed the difference between technically producible resources and reserves. To support that discussion I made a figure explaining how different types of crude oil are classified. All the oil formed millions of years ago is termed, “Total Petroleum Initially in Place (PIIP). We have now found most of the world’s producible oil but there are still some oilfields yet to be discovered. (Details on this will be found in the book.) Of all the oil that we have already found there is some that cannot technically be produced, i.e. is […]

Posted On : Published By : Tom Whipple
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Struggling U.S. oil producers get credit lifeline amid downturn

An oil refinery is seen in Carson, California March 4, 2015. An autumn credit crunch was expected to hit many independent U.S. oil producers, starving the industry of billions of dollars and further denting company budgets and drilling plans. But banks that adjust their loans to energy companies every six months based on the oil price and volumes of reserves were more lenient than many expected this time, leaving producers with more cash for drilling and allowing them to supply more oil to a market already flush with excess crude. The biannual process, known in the industry as redetermination, shaved only 4 percent off bank loans to oil and gas companies, according to a Reuters analysis of loan data, surprising experts who had expected deeper cuts because of a protracted oil price rout. It offers cash-starved energy firms a lifeline right when oil prices are back near six-year lows […]

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North Dakota’s Bakken Pumps Less Oil for First Time in Decade

The shale boom in North Dakota has softened to a whisper. The state’s Bakken oil region produced less oil in September than it did the previous year, the first time that’s happened in more than a decade. Output fell as low oil prices, exacerbated by the region’s remoteness, caused companies to scale back drilling operations and delay completing new wells. North Dakota’s portion of the Bakken produced 1.11 million barrels a day in September, down 1.1 percent from the same month a year ago, according to state data. Half the oil left the state by costly truck and rail routes, forcing producers to offer steep discounts. Along with an overall decline in crude prices, that’s prompted drillers to idle 67 percent of the rigs that were in the region last year. “The production drop was inevitable with the rig decline and the low-price environment,” Carl Larry, head of oil […]

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Oil Majors’ Dividends Survive Plunge in Oil Prices

The world’s biggest energy companies have doubled down on their promise to protect dividends, despite a precipitous drop in profits this year, driven by a steep decline in oil prices. “The dividends and payouts to shareholders have no reason to be as volatile as the oil price,” said Patrick Pouyanné, chief executive of France’s Total SA, TOT -0.17 % the world’s fourth-largest oil company by production, at a conference in Abu Dhabi this week. He added that it would be a “terrible mistake” to remove dividends and a sign that “we aren’t good at our business.” Oil prices are currently trading slightly above $40 a barrel—their lowest levels since August—and more investment banks, energy companies and analysts don’t see the price rising above $60 a barrel until 2017. The International Energy Agency said Tuesday oil prices would slowly rise to $80 a barrel by 2020, but also outlined a […]

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Should Oil Firms Be Held Liable in Earthquake Lawsuits?

Earthquake damage in Sparks, Okla., in 2011. The number of quakes in Oklahoma has soared. In 2011, a string of powerful earthquakes struck near the town of Prague, Okla., part of a surge in seismic activity in the state. Geologists eventually linked the quakes to increased oil and natural-gas production in the area—specifically, to the practice of injecting wastewater from hydraulic fracturing, or fracking, into wells deep underground. Sandra Ladra, a Prague resident who was injured in the most severe of the quakes, brought a lawsuit against New Dominion LLC and other oil and gas companies that operate injection wells in the region, accusing the companies of engaging in “ultrahazardous activities” that led to her injuries. In July, the Oklahoma Supreme Court allowed the case to go forward. So now it’s up to the courts to decide whether oil and gas drillers should be held liable for the damages […]

Posted On : Published By : Tom Whipple