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Jul. 7, 2015, 12:56 PM
- Royal Dutch Shell’s (RDS.A, RDS.B) drive to resume Arctic drilling this summer hits another roadblock, as a hole is found in the hull of an ice management vessel meant to safeguard the company’s operations in the Chukchi Sea.
- The icebreaker has returned to port and is being examined by marine experts, but it is uncertain how quickly the breach in its hull can be repaired and whether it will delay Shell’s hopes to begin drilling an oil well in the Chukchi Sea later this month.
- The ship is just one of the 29 vessels in Shell’s Arctic fleet, but it is unique since it carries a critical piece of the company’s Arctic containment system: a capping stack designed to fit on top of a damaged well in case of a blowout or other emergency.
Jul. 6, 2015, 11:23 AM
- Brazil’s congress is likely to pass a landmark bill that could ease financial pressure on state-controlled Petrobras (PBR -6.6%) by opening the country’s biggest offshore oil discoveries to greater foreign and private investment, Financial Times reports.
- The bill, which could pass as soon as September, is aimed at stimulating much needed investment into one of the world`s most promising oil exploration areas; oil majors such as Royal Dutch Shell (RDS.A, RDS.B), which so far have been permitted to participate in the pre-salt only as financial partners to PBR, have indicated their interest in becoming operators should the rule change.
- The bill has gained strength in recent days with support from the leader of the senate, whose party dominates both houses of congress; Pres. Rousseff has publicly opposed the proposal, but her ability to block the bill is seen as limited.
Jul. 1, 2015, 5:19 PM
- Saudi Arabia’s move to abandon its role as the balancing force in world oil markets has successfully pressured U.S. shale players and put the brakes on America’s energy boom, Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden tells Financial Times.
- Many in the industry had come to believe - incorrectly - that price risk had ceased to exist, assuming that OPEC always would adjust the oil volumes it supplied to meet global demand and keep crude prices at more than $100/bbl, van Beurden says.
- The CEO stopped short of predicting a sharp slide in U.S. output, arguing that companies’ efforts to cut costs and improve efficiency meant that production likely would continue "for a while” at roughly current levels, until “the sweet spots start running out."
- But it would be hard to justify substantial new spending on infrastructure and drilling if U.S. crude prices remain at $50-$60/bbl, since extracting “more marginal” barrels would need higher oil prices, van Beurden says.
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Jul. 1, 2015, 4:59 PM
- Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO), which entered Brazil’s giant deepwater oilfields two years ago, are now looking to increase their presence as Petrobras (NYSE:PBR) sells assets to pay down debt, Bloomberg reports.
- The Chinese companies, as well as Royal Dutch Shell (RDS.A, RDS.B) and Statoil (NYSE:STO) are said to be among companies interested in buying stakes in Brazil's pre-salt offshore exploration blocks, and are preparing for bids to be presented as soon as this month.
- PBR removed the Carcara and Jupiter pre-salt discoveries from its schedule of projects to start producing by 2020, indicating that the fields may be for sale, BofA said in a recent research report.
Jul. 1, 2015, 12:45 PM
- Royal Dutch Shell (RDS.A, RDS.B) says it will move ahead with its Appomattox deepwater development, a project that will include building the company’s eighth and largest deepwater platform in the Gulf of Mexico.
- The platform will produce from two fields, Appomattox and Vicksburg, with peak daily production estimated at 175K boe/day; last year, Shell’s Gulf production was 225K boe/day.
- Shell says it had lowered the cost of the project by 20% through design improvements, supply chain savings and reducing the number of wells required for development; it estimates the breakeven price for the development at $55/bbl.
- Shell expects the project to start up around the end of the decade.
Jul. 1, 2015, 7:59 AM
- Royal Dutch Shell (RDS.A, RDS.B) may be forced to scale back its hopes of completing two exploratory oil wells in Arctic waters north of Alaska this summer because of wildlife protections.
- The U.S. Fish and Wildlife Service ruled late yesterday to allow sound from Shell’s planned drilling to disturb walruses, polar bears and other marine mammals, but because of the noise factor, Shell cannot simultaneously bore planned wells that are just nine miles apart because of a regulation requires a 15-mile buffer zone around active drilling rigs.
- In effect, Shell can still move two contracted rigs to its Burger prospect 70 miles northwest of Alaska’s coastline, but only one can be drilling at any given time.
- Shell says it still plans to carry out curtailed drilling operations, which depend on winning at least one more federal permit, after already committing ~$1B to this year’s planned drilling activities and moving major assets to Alaska.
Jun. 29, 2015, 6:58 PM
- Thick sea ice could clog the site of Royal Dutch Shell’s (RDS.A, RDS.B) planned oil wells in the Arctic Ocean until late July, potentially shaving a week off the already narrow window for exploratory drilling in the region, FuelFix's Jennifer Dlouhy writes.
- But Shell's experts say the ice may be melting sooner this year, and are forecasting the third week in July as presenting the first opportunity to begin drilling operations, which would represent a much earlier opening than usual; over the past 11 years, on average, the waters over Shell’s Burger prospect have remained covered with floating ice until Aug. 12.
- One of Shell's contracted drilling rigs - the Transocean Polar Pioneer - arived over the weekend at Dutch Harbor, Alaska, to wait for an opening, with a second rig - the Noble Discoverer - poised to follow soon.
- The flurry of activity comes even though Shell still lacks all the essential federal approvals for its planned drilling.
Jun. 26, 2015, 4:58 PM
- Alberta's government names the top executive of a province-owned bank, ATB Financial CEO Dave Mowat, to head a panel to review oil and natural gas royalty payments and issue recommendations by year’s end.
- The announcement to move ahead with the royalty review, even as oil-rich Alberta struggles with sharply lower crude prices, comes a day after the province said it would double a carbon tax levied on large-scale emitters of greenhouse gases over the next two years.
- Alberta is home of the Canadian subsidiaries of energy giants Exxon Mobil (XOM, IMO), Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT), among others.
- Among other top Alberta oil producers: SU, OTCPK:HUSKF, CVE, CNQ, ECA, TLM, OTCQX:COSWF, CPG, OTCPK:PEGFF
Jun. 26, 2015, 10:32 AM
- At least two of Canada's biggest carbon emitters have given the thumbs-up to Alberta's plan to strengthen its greenhouse gas rules.
- Capital Power (OTC:CPXWF) CEO Brian Vaasjo cheered the changes yesterday, saying more green energy investment is likely to result, and told investors that during 2016-20 the company expects higher wholesale power prices to partially offset the cost of complying with the new rules.
- Shell Canada (RDS.A, RDS.B) President Lorraine Mitchelmore said the provincial government's announcement "is a clear signal that Alberta is committed to doing its part to address climate change."
- Analysts at Desjardins Capital say they expect the tweaks to be "very manageable" but will serve as "another overhang on the sector," and predict Alberta's plan is just the first phase of a major overhaul that will spread to other provinces.
Jun. 24, 2015, 2:32 PM
- Royal Dutch Shell (RDS.A, RDS.B) executives have met with officials in Tehran to discuss investing in Iran's energy sector, the first time an international oil major has publicly confirmed such talks, Financial Times reports.
- A Shell spokesperson tells FT that its officials discussed outstanding debt owed to the National Iranian Oil Co. for crude that was lifted but not paid for, as well as potential areas for cooperation if sanctions are lifted.
- Industry insiders say Iran is drawing up new contracts that would replace earlier deals with more attractive terms treating foreign groups as joint venture partners rather than as contractors.
Jun. 24, 2015, 10:43 AM
- Royal Dutch Shell (RDS.A, RDS.B) is upgraded to Buy from Hold at Deutsche Bank, which believes Shell's dividend is sustainable and that the BG Group takeover is likely to proceed.
- Contrary to market perception, the firm thinks imminent project startups could lead to an increase in Shell's cash flow to $17B by 2018 from $12B in 2014, which should offer strong support to the dividend, while also expecting "durable cash flow growth" from LNG for the combined Shell-BG entity.
- Deutsche Bank also says the combined Shell/BG trading portfolio should offer limited spot exposure in the near term, although with meaningful scope for optimization of logistics.
Jun. 24, 2015, 7:48 AM
- Royal Dutch Shell (RDS.A, RDS.B) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY) officially file their plans to form the world's biggest natural gas producer with competition regulators in Brazil, a key hurdle and strategic area for Shell's interest.
- Brazil is seen as key to Shell’s interest in BG, with CEO Ben van Beurden saying that the combined group would produce 550K bbl/day from the country by the end of this decade, 4x more than Shell’s current production.
- The deal also would make Shell the single largest foreign owner of Brazilian oil, which has raised concerns about the level of scrutiny the BG takeover will face from the country's regulators.
- Last week, the blockbuster deal received its first regulatory approval, from the U.S. FTC.
Jun. 23, 2015, 5:37 PM
- Royal Dutch Shell’s (RDS.A, RDS.B) plans to drill two exploratory wells in the Arctic Ocean this summer could be thwarted by an obscure permitting requirement that effectively bars drilling operations close to each other in waters off Alaska, according to the FuelFix blog.
- The restriction is found in rules for obtaining a letter of authorization that allows companies to disturb walruses, seals and other animals in the region - among the last permits Shell needs to launch activities in the Chukchi Sea next month.
- Under a 2013 Fish and Wildlife Service regulation, the authorizations are precluded for drilling activities happening within 15 miles of each other; the two wells Shell wants to drill this summer are nine miles apart.
- Shell needs only four more regulatory approvals: two well-specific drilling permits from the Interior Department’s Bureau of Safety and Environmental Enforcement and the two letters of authorization from the Fish and Wildlife Service.
Jun. 23, 2015, 12:22 PM
- The Dutch government has ordered a further tightening of production at Groningen, Europe's largest gas field, in response to earthquakes that have caused extensive property damage in the Netherlands' northernmost province.
- Production at the field will be capped at 13.5B cm in H2 of this year and at 30B cm for all of 2015, after output was cut to 16.B cm for H1 which made for an annualized rate of 33B cm, down from 39.4B cm previously.
- The Groningen field is operated by a joint venture including Royal Dutch Shell (RDS.A, RDS.B), Exxon Mobil (NYSE:XOM) and the Dutch government.
Jun. 23, 2015, 8:28 AM
- As one of Royal Dutch Shell’s (RDS.A, RDS.B) Arctic drilling rigs makes its way to Alaska, a second with a somewhat checkered history reportedly has some critical federal permits still pending.
- The Noble Discoverer drillship, now docked in Washington state waters, has received a critical certificate of compliance from the U.S. Coast Guard verifying it meets a host of safety and security requirements after Shell and Noble Corp. (NYSE:NE) cleared more than a dozen violations documented at the vessel during a May 20 inspection.
- But it is unclear when the rig might begin traveling north; the first drillship, the Transocean Polar Pioneer, received a certificate of compliance on June 14 and began its trek to Alaska the next day.
- After Shell's ill-fated north Alaska drilling attempt three years ago, Noble Corp. pleaded guilty to eight felony charges tied to pollution, propulsion and record keeping problems on the Discoverer.
Jun. 19, 2015, 12:59 PM
- BP is downgraded to Sector Perform from Outperform at RBC, as the firm continues to see potential upside to the company's cost reduction potential but believes the risk-reward opportunity has become more balanced for now.
- Meanwhile, the firm upgrades Royal Dutch Shell (RDS.A, RDS.B) to Outperform from Sector Perform, noting that it is now the biggest underperformer in the sector YTD and down 16% since announcing the BG Group acquisition in April.
- RBC thinks Shell's current share price underappreciates both BG's core asset quality and the company's ability to extract additional value from its enlarged portfolio.
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