Tue, Nov. 24, 12:49 PM
- Canadian oil producers may say they are on board with Alberta’s new climate change policy goals, but the requirement that companies reduce their methane emissions by 45% will add costs "in the tens or hundreds of millions of dollars over the next five years," the Canadian Association of Petroleum Producers says.
- Alberta’s oil and gas sector produced 30.4 megatons of methane emissions in 2013, accounting for 70% of the province’s overall methane emissions.
- National Bank Financial analyst Kyle Preston calls Alberta’s climate change policy “fair and accommodating” for oil and gas companies, and says newer energy projects such as Canadian Natural Resources' (NYSE:CNQ) Horizon oil sands project and MEG Energy’s (OTCPK:MEGEF) Christina Lake facility emit less greenhouse gas than older facilities, which will be hit harder by the new policies.
- Other related tickers: TRP, ENB, IMO, XOM, RDS.A, RDS.B, OTCQX:COSWF, OTCPK:HUSKF, CVE
Tue, Nov. 24, 8:51 AM
- Royal Dutch Shell (RDS.A, RDS.B) is fined £22.5K ($34K) for causing the worst oil spill off the U.K. in a decade at the North Sea's Gannet field in 2011.
- "We have learned lessons from this review and have applied them across our U.K. upstream operations," says Paul Goodfellow, Shell's upstream director for the U.K. and Ireland.
- "Despite being responsible for worst North Sea spill in a decade, the level of the fine is literally a drop in the ocean when compared to the billions earned by Shell annually," the World Wildlife Federation says.
Mon, Nov. 23, 8:19 AM
- Alberta's government announces plans to cap oil sands emissions for producers, phase out coal power plants and implement a carbon tax in an effort to curb pollution.
- The provincial government in impose a limit of 100 megatons/year of carbon emissions, above current annual emissions of ~70 megatons, phase out coal power plants by 2030, and set a carbon price of C$20/metric ton (US$15) by 2017 which rises to C$30 in 2018.
- The Canadian Association of Petroleum Producers supports the initiative, saying it could help improve Alberta’s image in markets to which oil sands producers hope to expand access.
- "This will create a wealth of opportunities and jobs for generations to come. We in Alberta want to take a leadership role on climate," says Suncor (NYSE:SU) CEO Steve Williams.
- Coal producers criticized the new policy, however, saying it will raise electricity costs in Alberta and cost Canadian jobs.
- Other relevant tickers: TRP, ENB, IMO, XOM, RDS.A, RDS.B, OTCQX:COSWF, OTCPK:HUSKF, CVE, CNQ
Fri, Nov. 20, 10:53 AM
- Production from Argentina's Vaca Muerta shale play is expected to double by 2018, according to a new development study by Wood Mackenzie.
- The study says oil and gas output from the play will be moderate in 2016, with a Y/Y production increase of 10%, but the increase will see a sharp upturn by 2020.
- The consultant sees ~200 wells brought online in the region in 2015, with fewer in 2016 as vertical wells are phased down.
- In order to fully develop Vaca Muerta, the study suggests that more joint venture deals will be necessary, as YPF will need outside assistance to develop the 6.3M acres it holds.
- Related tickers: XOM, CVX, RDS.A, RDS.B
Thu, Nov. 19, 8:57 AM
- Royal Dutch Shell (RDS.A, RDS.B) says it will decide next year whether to resume installing subsea compressors at its giant Ormen Lange field offshore Norway, after stopping the project last year to save costs.
- The Ormen Lange field, which feeds the Langeled pipeline under the North Sea, is one of the U.K.'s biggest sources of natural gas; Shell's partners include Statoil, Exxon Mobil and Dong Energy.
Thu, Nov. 19, 7:57 AM
- Royal Dutch Shell's (RDS.A, RDS.B) proposed tie-up with BG Group (OTCQX:BRGXF, OTCQX:BRGYY) secured clearance yesterday from one of two Australian regulators but still requires approval from China, but Reuters reports that Chinese regulators are pressing the company to sweeten long-term gas supply contracts, which could cast new doubt on the near-term benefits of the deal.
- As the Chinese regulatory approval process entered its third and final 60-day phase earlier this month, the government asked Shell to review prices in LNG contracts worth tens of billions of dollars annually with China National Petroleum (NYSE:PTR), Cnooc (NYSE:CEO) and Sinopec (NYSE:SNP), according to the report.
- Shell officials are said to fear that a revision of the terms of the contracts could create a ripple effect around the world, further eroding gas prices.
Wed, Nov. 18, 6:54 PM
- Royal Dutch Shell (RDS.A, RDS.B) clears a major hurdle to its proposed $70B takeover of BG Group (OTCQX:BRGXF, OTCQX:BRGYY), winning approval from Australia's competition watchdog.
- The acquisition would be unlikely to substantially lessen competition in the wholesale natural gas market, in either Queensland or eastern Australia, the Australian Competition and Consumer Commission says.
- Shell and BG have said the decision was crucial, after having secured approvals from anti-trust authorities in Brazil, the EU and the U.S.; the deal still needs approval from China and Australia's Foreign Investment Review Board to go ahead as planned in early 2016.
Wed, Nov. 18, 4:47 PM
- Royal Dutch Shell (RDS.A, RDS.B) says it found 100M boe buried at one of its recent deepwater discoveries in the Gulf of Mexico.
- Probing the one-year-old Kaikias discovery ~60 miles south of the Louisiana coast in 4,575 ft. of water, Shell found ~300 net ft. of oil pay, adding to the 1B barrels in the Mars-Ursa basin; Shell has pumped crude from the region since the mid-1990s and expects to produce a peak 100K barrels from its relatively new Olympus platform next year.
- The Kaikias is not one of the company’s biggest finds but its location next to three production facilities makes it much cheaper to develop than more remote projects.
Wed, Nov. 18, 9:11 AM
- A Dutch court orders more cuts in gas production at the Groningen field in The Netherlands, saying the government had given too little consideration to earthquakes caused by gas extraction.
- The court says output at Europe's largest gas field will now be capped at 27B cm/year from 33B cm through October 2016, adding that the government had failed to sufficiently weigh public safety risks.
- Production already had been cut twice this year from an original target of 39.4B cm, sending regional prices higher.
- 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.
Mon, Nov. 16, 6:53 PM
- Low crude prices have caused oil companies to cut spending but they are still protecting their hefty dividends, WSJ reports, as the four supermajors - Exxon (NYSE:XOM), Chevron (NYSE:CVX), Shell (RDS.A, RDS.B) and BP - have distributed nearly $28B to their shareholders YTD, ~10% more than the same period in 2014, and as their collective earnings have fallen by more than 70%.
- The payments to investors come amid $22B in reduced spending on exploration and development of oil fields, and 80 scrapped or delayed projects so far this year, according to BP E&P chief Lamar McKay.
- The supermajors have little choice but to pay fat dividends to keep investors, but it is a potentially risky strategy given concerns about the length of the oil price downturn and its impact on cash flow; dividend yields oil companies made last quarter are at the highest level in more than a decade, according to FactSet.
- But investors are hooked: CVX has increased its annual per-share dividend for each of the last 28 years, XOM has raised its dividend by an average of 6.4% every year for the last 33 years, and Shell and BP have reiterated that maintaining returns to shareholders is a priority.
Mon, Nov. 16, 4:45 PM
- Royal Dutch Shell (RDS.A, RDS.B) says Lorraine Mitchelmore, the head of its Canadian unit for the past six years, will leave the company effective Jan. 1.
- The move comes less than a month after Shell scrapped its Carmon Creek oil sands expansion, taking a US$2B charge and citing high costs and uncertainty over pipeline expansions.
- Mitchelmore will be replaced by Michael Crothers, who now serves as VP for Shell’s unconventional oil and gas business in North America; he will continue to oversee those operations after taking over as Shell Canada president.
Mon, Nov. 16, 10:53 AM
- Qatar's sovereign wealth fund has sold shares in Royal Dutch Shell (RDS.A, RDS.B) and BG Group (OTCQX:BRGXF, OTCQX:BRGYY) worth nearly £1B in recent weeks, raising fresh questions over whether the proposed merger has the support of major shareholders, The Telegraph reports.
- The Qatari fund sold ~43M shares in BG worth ~£550M and a further 24M shares in Shell with a value of ~£421M over a period of less than three weeks between the end of October and the first week of November.
- The fund is one of Shell’s biggest investors, with a 4.9% stake, and also holds a 1.7% stake in BG; Qatar also is one of the world’s biggest producers of liquid natural gas, making its support for the merger important to both sides.
Mon, Nov. 16, 9:10 AM
- Royal Dutch Shell (RDS.A, RDS.B) plans to retain four senior executives from BG Group (OTCQX:BRGXF, OTCQX:BRGYY) after the merger of the two companies next year, Bloomberg reports, citing an internal memo.
- BG COO Sami Iskander reportedly will become Shell's executive VP for joint ventures, BG head of trading Steve Hill will become executive VP for gas and energy marketing and trading, BG general counsel Tom Melbye Eide will be Shell’s general counsel for upstream, and BG head of strategy and business development Katie Jackson will join Shell in a role to be determined.
- The memo does not mention BG CEO Helge Lund or CFO Simon Lowth, the report says.
Fri, Nov. 13, 11:29 AM
- Royal Dutch Shell’s (RDS.A, RDS.B) new $1B oil production vessel began a 15K-mile journey this week from a Singapore shipyard to the Gulf of Mexico, where it will become the fourth ultra deepwater production facility to extract hydrocarbons from the Lower Tertiary.
- Shell plans to begin filling barrels next year with oil from two wells drilled in ~9,500 ft. of water, the deepest-ever depth.
- But the production vessel’s 1-2 month trip comes amid an industry whiplash from an oil price collapse that could force oil companies to scrap up to $48B worth of development spending in the Lower Tertiary over the next 15 years, according to energy research firm Wood Mackenzie.
Wed, Nov. 11, 4:41 PM
- Shell Midstream Partners (NYSE:SHLX) agrees to acquire Pecten Midstream from a Royal Dutch Shell (RDS.A, RDS.B) pipeline subsidiary for $390M.
- Pecten operates the Lockport Crude Terminal ~50 miles from Chicago and the Auger Pipeline System, which transports crude oil from parts of the Garden Banks and Keathley Canyon offshore blocks in the Gulf of Mexico.
- SHLX says the acquisition price reflects a ~8.6x multiple of the assets' forecast 2016 adjusted EBITDA; it expects the deal to be immediately accretive to unitholders.
- SHLX increases its total borrowing capacity under its revolving credit facilities to $580M in connection with the acquisition.
- To help fund the deal, SHLX launches a public offering of 8M common units, with an underwriters option to purchase up to an additional 1.2M units.
Wed, Nov. 11, 10:48 AM
- U.S. natural gas prices, already down ~45% in the past year, are poised to extend losses if the El Nino weather pattern persists much longer and delays cold weather that normally drives late-year demand, according to Royal Dutch Shell (RDS.A, RDS.B) energy analyst Laird Dyer.
- The El Nino warm-water phenomenon in the Pacific Ocean likely will prevent a repeat of the Polar Vortex that slammed the U.S. with bone-chilling cold the past two winters, Dyer says.
- Gas stored in underground chambers and old reservoirs probably will exceed 4T cf in a few weeks because mild weather across much of the U.S. is forestalling the need to stoke furnaces, according to Dyer.
- ETFs: UNG, UGAZ, DGAZ, BOIL, GAZ, KOLD, UNL, DCNG
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