Yesterday, 12:24 PM
- Europe's largest oil companies have come out forcefully against coal, while they tout their rising production of natural gas to help reduce carbon emissions and lessen the world's reliance on coal for heating homes and creating electricity.
- Royal Dutch Shell (RDS.A, RDS.B), BP, Total (NYSE:TOT), Statoil (NYSE:STO) and Eni (NYSE:E) sent a joint letter to the U.N. this week calling for measures to push up the cost of burning coal, either by taxing carbon emissions directly or reducing the supply of carbon emission credits to make those credits pricier on the secondary market.
- Financial Times notes the "more prosaic reason for the energy companies' enthusiasm" is that half of their proven reserves are in natural gas; "with a UN Climate Conference approaching in December, there is every reason for these companies to promote the use of natural gas over coal, which emits roughly twice the carbon for each unit of energy," FT says.
- Shell now produces more gas than crude oil and is set to solidify its position on top of the LNG market with its $70B deal to buy BG Group; roughly half of BP's production is natural gas, which could rise to 60% by the end of the decade.
Yesterday, 9:55 AM
- Statoil (STO +3.8%) opens higher after saying it agrees to significantly boost gas supplies to the U.K.’s SSE under an expansion of their existing supply agreement.
- STO says it will begin supplying 2.5B cm/year to SSE in October, up from the original annual volume of 500M cm/year under the six-year deal signed by the pair in October last year.
- STO’s long-term supply deals with SSE and Centrica represent nearly 15% of the U.K.’s 70B cm/year demand for gas.
Mon, Jun. 1, 5:33 PM
- Firefighters report some progress fighting wildfires in Alberta's oil producing region but a number of oil sands projects remain shut down, keeping ~10% of total oil sands production offline.
- The number of fires has dropped to 35 from 42 on Friday, with five considered out of control.
- The wildfire hazard in the Lac la Biche region, where Cenovus Energy (NYSE:CVE) and Canadian Natural Resources (NYSE:CNQ) evacuated their respective Foster Creek and Primrose projects more than a week ago, was downgraded today to “moderate” from “extreme” by Alberta's government.
- CVE also evacuated workers from its non-producing Narrows Lake site last week due to a different fire, and says that blaze is now under control.
- Statoil (NYSE:STO) had evacuated non-essential staff from its Leismer oil sands project with no impact to production, and now says it hopes to remobilize evacuated workers this week.
- A wildfire burning near MEG Energy’s (OTCPK:MEGEF) Christina Lake site also remains out of control.
Mon, Jun. 1, 3:58 PM
- Teekay Offshore Partners (TOO -1.1%) says it has signs new long-term contracts with a consortium of energy companies to provide shuttle tanker services for oil production activities on Canada's east coast.
- TOO says it will construct three Suezmax-size, DP2 shuttle tanker newbuildings with a South Korean shipyard for a fully built-up cost of ~$365M, with an option to order a fourth vessel if needed; the three firm vessels are expected to be delivered in Q4 2017 through H1 2018.
- The group of companies include Chevron (NYSE:CVX), Husky Energy (OTCPK:HUSKF), Murphy Oil (NYSE:MUR), Statoil (NYSE:STO) and Suncor Energy (NYSE:SU).
Mon, Jun. 1, 3:06 AM
- Europe's six largest oil and gas groups have united together in seeking help from the United Nations to stop global warming and create a global carbon pricing system.
- "We owe it to future generations to seek realistic, workable solutions to the challenge of providing more energy while tackling climate change," the companies' executives said in a letter to the FT.
- The step comes as nearly 200 countries prepare to sign a global climate pact at a U.N. conference in December.
- Companies involved: Shell (RDS.A, RDS.B), Total (NYSE:TOT), BP, BG Group (OTCQX:BRGYY), Statoil (NYSE:STO) and Eni (NYSE:E).
- Previously: Europe's oil giants look to add unified voice to climate debate (May. 20 2015)
Thu, May 28, 6:58 PM
- Oil companies and industry trade groups lash out against the Obama administration plan to require rigs and time to drill relief wells in case of emergencies at their operations in U.S. Arctic waters, claiming the proposed rules would shorten an already brief window for exploratory drilling while dramatically boosting the costs of the operations.
- The group also says the proposal would lock in the “same-season relief well” requirement even though rapidly evolving technologies might be a better solution when companies lose control of an Arctic well.
- Similar arguments were delivered today by Royal Dutch Shell (RDS.A, RDS.B) and Statoil (NYSE:STO), which both hold active leases in the Chukchi and Beaufort seas north of Alaska; ConocoPhilllips (NYSE:COP), another leaseholder in the area, filed comments that are not yet available.
- A key sticking point is the same-season relief well requirement - not just the proposed rules for it, but whether it should be allowed in the first place; Shell is asking the Interior Department to replace the requirement with a mandate that oil companies demonstrate they have "assets that can address a source-control event."
Wed, May 27, 2:37 PM
- Wildfires in northern Alberta have spread farther into the oil sands area, prompting the shutdown of ~230K bbl/day of production and keeping ~10% of the province's output offline.
- Cenovus Energy (CVE -0.7%) said yesterday it evacuated workers from its Narrows Lake oil sands project and Birch Mountain natural gas plant because of the fires; Narrows Lake is not yet producing, and workers were finishing the camp project there when they were evacuated.
- CVE already had closed its 135K bbl/day Foster Creek operations and evacuated 1,700 workers, Canadian Natural Resources (CNQ -0.6%) has cut 18K bbl/day of output at its Kirby South oil sands operation and 80K bbl/day from its Primrose facility, MEG Energy (OTCPK:MEGEF) halted operations at its Christina Lake site, and Statoil (STO -0.3%) says its Leismer site remains in operation but it will evacuate non-essential staff.
- Economists warn that the fires could further cut Canada’s GDP, already hit by the collapse in oil prices; oil sands extraction directly accounts for 2% of GDP but total energy extraction and support activities account for 6% of GDP, Bank of America says.
Wed, May 27, 11:40 AM
- Total (TOT +1.6%) says it has achieved the milestone of producing a cumulative 2B barrels of oil from its deepwater offshore Block 17 site off the coast of Angola, making the site its most prolific with production of more than 700K bbl/day; to add perspective, all of Britain produces ~800K bbl/day of oil.
- TOT operates Block 17 with a 40% interest, alongside Statoil (NYSE:STO) with 23.33%, Exxon (NYSE:XOM) 20% and BP 16.67%.
- Apart from Block 17, TOT owns a 30% stake in the Kaombo development, which holds ~650M barrels of total reserves with an anticipated total production capacity of 230K bbl/day.
Sat, May 23, 10:50 AM
- Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden endorses the view that the world’s fossil fuel reserves cannot be burned unless a way is found to capture their carbon emissions, but maintains that hydrocarbons will be needed for years to come.
- Justifying Shell's decision to drill exploration wells in the Alaskan Arctic, the CEO says: "The decline in existing production is always going to be faster than the decline that the most successful [low carbon] policies can create. There is always going to be a need for investment."
- But van Beurden criticizes calls for pension funds and foundations to divest from energy companies, in particular The Guardian's "Keep it in the Ground" campaign, and considers it a simplistic solution.
- Shell confirms it will attend an upcoming meeting with major European energy companies including BP, Total (NYSE:TOT), Statoil (NYSE:STO) and Eni (NYSE:E) to form a unified strategy on dealing with climate change issues ahead of U.N. talks that could force billions of dollars of oil, coal and gas to remain in the ground.
- In Canada, Suncor (NYSE:SU) CEO Steve Williams says his company is willing to pay a carbon tax but thinks it should apply to both companies and consumers; "If you look at carbon production in a modern economy, about 80% of it is at the point of consumption or the point of use," he says.
Wed, May 20, 11:15 PM
- Europe’s largest oil companies - including Shell (RDS.A, RDS.B), Total (NYSE:TOT), BP, Statoil (NYSE:STO) and Eni (NYSE:E) - are banding together to forge a joint strategy on climate change policy, worried they could be ignored as the world moves toward a potential deal limiting greenhouse gases.
- The companies are said to be working on a plan to start a new industry body or think tank to develop common positions on climate change issues, with a public announcement as soon as next month.
- “If we don’t [act], we risk becoming an industry that neither gets access nor acceptance, and that’s not a good thing,” as STO's Eldar Saetre said recently.
- So far, the largest U.S. companies - Exxon (NYSE:XOM) and Chevron (NYSE:CVX) - are not participating.
Wed, May 20, 12:45 PM
- A natural gas condensate leak at Statoil's (NYSE:STO) Gudrun platform in the North Sea in February posed a major risk of an explosion and came close to causing a deadly accident, according to the company's own investigation.
- By coincidence, no one was close to the ruptured pipeline, prompting STO's investigation team to say that "pure chance" prevented a full pipeline break.
- The platform was shut for 23 days as a result of the leak.
Tue, May 19, 8:43 AM
- BP says it plans to sell part of its oil project off southern Australia ahead of an exploration campaign scheduled to start late next year at a cost of more than A$1B ($800M).
- BP wants to cut its stake to 40%-50% from 70%, with the sales process starting in H2 of this year: Statoil (NYSE:STO) owns the rest of the project in the Great Australian Bight.
- Although exploration budgets are tight across the industry, BP says it remains committed to the program in the Bight, which the company has described as "the last big unexplored basin in the whole world.”
Mon, May 18, 7:45 PM
- Goldman Sachs had a lot to say about all corners of the energy sector today in addition to the cut in its long-term oil price forecast, its Sell recommendations for oil majors BP, Statoil (NYSE:STO) and Chevron (NYSE:CVX), and its gloomy outlook for offshore drillers Transocean (NYSE:RIG), Diamond Offshore (NYSE:DO) and Atwood Oceanics (NYSE:ATW).
- Goldman awards a Buy rating for Exxon Mobil (NYSE:XOM), "the only U.S. or European major that can generate sufficient free cash flow to cover its dividend near $60/bbl in 2016-17"; while the firm says other oil majors will be struggling to keep the dividend flat, XOM will be in a position to increase the dividend for the next several years.
- With its expectation for long-term weakness in oil and gas prices, Goldman sees risk exposure in many names that are reliant on commodity prices, suggesting selling LINE, DPM, NGLS, while predicting PAGP and NS would benefit from a removal of the U.S. crude oil export ban.
- The firm thinks many midstream MLP names now offer attractive valuations, recommending ENB, EPD, ETE, PAA, SXL, WNRL.
- Goldman sees an upturn for frac sand provider Emerge Energy (NYSE:EMES), upgrading shares to Buy from Neutral.
- Other Buys: CLR, NFX, CQP, HEP.
- Other Sells: TRP, TCP, GPOR, MUR, GTE
Mon, May 18, 2:35 PM
- More than $100B of spending on at least 26 major projects by the world’s energy companies has been slowed, postponed or canceled in the wake of plunging oil prices, including Royal Dutch Shell (RDS.A, RDS.B), BP, ConocoPhillips (NYSE:COP) and Statoil (NYSE:STO), according to a Financial Times analysis.
- One of the biggest developments to be shelved, Shell’s Arrow liquefied natural gas plant in Australia, accounted for almost a quarter of the planned spending reduction.
- Western Canada is suffering the most from the retrenchment, with nine Canadian oil sands projects pulled back, each ranging from $1B-$10B in planned expenditure, the analysis says.
- According to Morgan Stanley, which looked at capex guidance for 2015 from more than 120 companies, investment is expected to drop by a quarter this year to $389B from $520B.
Mon, May 18, 11:49 AM
- Goldman Sachs says its “lower for longer” oil price forecast would put significant pressure on integrated oil and gas companies such as BP (BP -0.8%)and Statoil (STO -2.7%), prompting the firm to downgrade its sector outlook to Cautious from Neutral and both energy giants to Sell from Neutral, citing long-term dividend risk for BP and cash-flow pressure on STO.
- The firm also downgrades Chevron (CVX -1%) to Sell from Neutral with a $99 price target, down from $111, saying CVX is burning through free cash flow, which should limit dividend growth in the coming quarters, and pointing risk to 2017 production guidance.
Wed, May 13, 9:39 AM
- Statoil (NYSE:STO) has increased by nearly 50% the volume of gas it will deliver to U.K. energy supplier Centrica (OTCPK:CPYYF) under an existing supply deal.
- STO now will supply 7.3B cm/year of gas to Centrica, up by 2.3B cm/year from the original 5B agreed under a 10-year supply pact signed in 2011, with deliveries due to start in October.
- Centrica also expands a three-year supply deal that came into effect last year with Gazprom (OTCPK:OGZPY) to 4.16B cm/year from 2.4B cm/year and will now run until 2021.
- "Britain needs ~70B cm of natural gas each year to heat homes and businesses and to generate electricity, and the U.K. now needs to import more than half of this," Centrica says.
STO vs. ETF Alternatives
Statoil ASA is an integrated oil and gas company. It explores, produces, transports, refines, and markets petroleum and petroleum-derived products. It has operations in Norway, rest of Europe, North America, Africa, Asia and South America.
Other News & PR