Thu, Mar. 5, 3:59 PM
- Oppenheimer's Fadel Gheit raises his price target on BP (BP -0.8%) to $50 from $45 while maintaining an Outperform rating, projecting the company to be free cash flow positive in 2016.
- Gheit calculates BP's operating cash flow at $22.5B in 2015 and $27.3B in 2016, after funding $20B in capex and a $5.95B dividend in each year, and expects the company to have a free cash flow deficit of $3.6B in 2015 but turn positive by $1.3B the following year.
- "Management believes the portfolio is diverse enough to balance fiscal and geopolitical risk while allowing it to focus on its strengths, which provides a unique platform for the future," Gheit writes.
Thu, Mar. 5, 11:28 AM
- Exxon Mobil (XOM -0.5%), with $17.9B in free cash flow to end 2014, is under much less pressure to cut spending than smaller rivals, which are coming under varying degrees of financial strain amid lower oil prices; 2015 capex is being cut by 12%, a striking display of stability when compared to 30%-40% capex cuts generally announced by small and midsized E&P companies.
- CEO Rex Tillerson says being able to keep spending at rates that others can't provides XOM "a whole lot of different kinds of opportunities” in two main areas: cutting costs and acquiring assets.
- On acquisitions, Tillerson’s comment that “there really is no limitation on what we might be interested in or considering" in terms of possible deals suggests he is prepared to be ambitious.
- While a rumored bid for BP is not impossible, most analysts are doubtful due to the political sensitivities of such a deal and uncertainty about liabilities from the 2010 Gulf of Mexico oil spill; Wolfe Research's Paul Sankey thinks XOM is most interested in a U.S.-focused midsized oil company, with “key potential targets” including HES, CLR, DVN, APA and APC.
Wed, Mar. 4, 4:39 PM
- BP has put up for sale its stake in one of Europe's biggest natural gas pipelines in the North Sea as part of its ongoing asset disposal program.
- BP holds a 36% interest in the Central Area Transmission System, which pumps up to 1.7B cf/day of gas from U.K. North Sea fields.
- Last June, British peer BG Group announced the sale of its 63% stake in CATS for nearly $1B to the Antin Infrastructure Partners fund.
Wed, Mar. 4, 3:28 PM
- Even as U.S. refiners and striking union workers returned to the bargaining table today for a new round of talks, the two sides appear to be digging in for a protracted struggle that could last through the spring.
- Royal Dutch Shell (RDS.A, RDS.B) said Monday that by midsummer its Deer Park refinery in Texas will be fully staffed with newly trained employees who are not affiliated with the United Steelworkers union, and added that ~20% of striking workers at the plant have defied the union and returned to work.
- Workers also have begun returning to their jobs at refineries owned by Shell and Saudi Aramco JV Motiva Enterprises, and LyondellBasell (NYSE:LYB) and Tesoro (NYSE:TSO) also say a growing number of employees are coming back to work.
- LYB said yesterday it had filed a complaint with the National Labor Relations Board alleging the union had threatened and harassed people trying to cross picket lines.
- The union has filed its own complaints to the NLRB in recent weeks, alleging Shell, LYB, TSO, BP and Marathon Petroleum (NYSE:MPC) have engaged in unfair practices, including threatening and coercing workers and failing to bargain in good faith.
Tue, Mar. 3, 2:21 PM
- BP (BP +1.2%) CEO Bob Dudley saw his total 2014 compensation rise more than 20% Y/Y to $12.7M from $10.17M in 2013, during a year when the company took a quarterly loss, according to the company's latest directors remuneration report.
- Dudley's salary and annual bonus fell to $2.95M from $4.21M in 2013 but deferred bonuses and performance shares' awards rose to $9.79M from $5.96M a year earlier.
- Total compensation - including benefits, shares and pension - totaled $15.3M, up ~$700K from 2013's $14.6M.
- BP annual report
Tue, Mar. 3, 10:17 AM
- Ohio is suing BP (BP +0.3%) for more than $33M, alleging the company double dipped by taking state funds and money from insurers to clean up accidental leaks from underground storage tanks at hundreds of its gas stations around the state.
- The state paid BP the money through the Petroleum Financial Assurance Fund, which helps to pay cleanup costs for storage tank owners but only if the company does not have insurance coverage or accept money from other sources; the state AG says BP had layers of insurance and often accepted both state and insurance money for the same leaks.
- BP says it acted in good faith and will fight the complaint.
Mon, Mar. 2, 2:42 PM
- BP's Bob Dudley joins other oil explorers calling for less onerous conditions from Mexico as the country opens its crude and natural gas reserves to outsiders for the first time in 75 years.
- Preliminary terms being offered by Mexico "need to be a little more competitive” in the wake of oil's collapse, the CEO says, echoing sentiments of Occidental Petroleum's (NYSE:OXY) Stephen Chazen that OXY would rather develop U.S. projects than “fool around with some ridiculous contract” in Mexico.
- Alfa (OTCPK:ALFFF), which has a partnership with Pacific Rubiales Energy (OTCPK:PEGFF), said last week that requirements to participate in the fields are "extremely high."
- Production sharing contracts for 14 Mexican shallow water blocks to be auctioned this year include a 60% cost recovery limit and 25% local content in the first year, terms that analysts say may be pricing the country out of the market as would-be investors take a more cautious approach.
Fri, Feb. 27, 2:42 PM
- BP is pushing back the start date for its contract with Helix Energy Solutions (HLX -2.2%) for the Q5000 well intervention vessel, sending HLX shares to 52-week lows.
- The well was scheduled to begin work in the Gulf of Mexico in Q3, but the amended agreement defers the start of the work to April 1, 2016.
- The amendment also contains certain other modifications that HLX says will give it greater flexibility to market the vessel to other potential customers, including prior to starting the work for BP.
Fri, Feb. 27, 9:17 AM
- A BP refinery in northwest Indiana has suffered its second major malfunction in three days, as a leak caused the shutdown of a crude distillation unit at the 413.5K bbl/day Whiting, Ind., refinery.
- The 110K bbl/day CDU was shut on Wednesday, but the refinery's other two CDUs remain in operation.
- On Monday, a compressor malfunctioned in pollution-reduction system for the gasoline-producing fluidic catalytic cracking unit, but there was no impact to production.
- Repairs on the CDU are expected to take a few days.
Wed, Feb. 25, 10:44 AM
- Several oil companies including BP are complaining to the FTC that Enterprise Products Partners (EPD +1%) is trying to dominate the exporting of U.S. oil, after it found a way around a decades-old legal ban, WSJ reports.
- EPD’s $5.9B purchase last fall of rival pipeline and logistics firm Oiltanking Partners gave it control of the single largest oil-storage operator on the Gulf coast at a time when space is at a premium, and oil companies that use the Oiltanking terminals on the Houston Ship Channel complain that EPD has started charging a per-barrel loading fee that raises the costs of their exports vs. EPD’s own shipments.
- EPD’s role as an exporter has put it in direct conflict with logistics clients, some of them say; “It prices us out of competition relative to them,” says an executive at a company that has been questioned by the FTC.
Tue, Feb. 24, 10:14 AM
- Oil production in the British section of the North Sea continued to decline in 2014 amid rising costs, high taxes and low oil prices, according to a report from an industry lobbying group which wants the U.K. government to cut taxes and streamline the complex regime for the oil and gas sector.
- British North Sea production in 2014 fell 1.1% Y/Y to 1.42M boe/day, the report says, down ~70% since the area's peak in 1999.
- The report notes that oil companies drilled only 14 exploration wells last year in the British part of the North Sea, vs. ~70 exploration wells drilled in the nearby Norwegian sector, where the government offers more generous tax incentives.
- Among the North Sea's major producers: BP, RDS.A, RDS.B, COP, E, BHP, TOT, CVX, CEO, OTCPK:BRGXF, OTCQX:BRGYY, OTCQX:REPYY, OTCPK:REPYF
Tue, Feb. 24, 2:49 AM
- BP (NYSE:BP) has appealed U.S. District Judge Carl Barbier's finding of the size of the 2010 Gulf of Mexico oil spill, which leaves the company potentially liable to pay $13.7B in fines.
- In January, Barbier ruled that 3.19M barrels of oil had spilled into the Gulf as a result of the disaster, but a new decision that less oil was spilled would likely translate into a lower fine for the company.
Mon, Feb. 23, 8:26 AM
- The United Steelworkers union expanded its strike over the weekend to the Motiva Enterprises refinery in Port Arthur, Tex., a 50-50 joint venture between Royal Dutch Shell (RDS.A, RDS.B) and Saudi Aramco which produces more than 600K bbl/day, as well as a Shell chemical plant in Louisiana.
- The union and Shell, the lead negotiator for the refinery companies, reportedly will meet on Wednesday for the first time since negotiations broke up on Feb. 20 without a deal.
- The union says it is seeking protections for worker safety and fatigue; Shell is now saying the strike is all about the desire of national union leaders to replace routine maintenance contractors with union-represented workers.
- The strike already has affected refineries and chemical plants owned by LyondellBasell (NYSE:LYB), Marathon Petroleum (NYSE:MPC), Tesoro (NYSE:TSO) and BP.
Sat, Feb. 21, 7:05 AM
- Lead negotiator Shell (RDS.A, RDS.B) says last night's face-to-face negotiations with the United Steelworkers union again failed to reach an agreement to end the 20-day-old U.S. refinery strike.
- Workers at several refineries and chemical plants were waiting for instructions to join the 5K-plus workers at 11 plants, including nine refineries accounting for 13% of U.S. production capacity.
- The strike has hit refineries and plants owned by Shell, BP, LyondellBasell (NYSE:LYB), Marathon Petroleum (NYSE:MPC) and Tesoro (NYSE:TSO) in California, Kentucky, Texas and Washington state; temporary replacement workers so far have kept plants running at nearly normal levels.
- The USW is seeking a three-year, industry-wide pact that would cover 30K workers at 63 U.S. refineries that together account for two-thirds of domestic capacity.
Thu, Feb. 19, 2:21 PM
- Judge Barbier rejects BP’s (BP -1.2%) request to cap its Deepwater Horizon oil spill liabilities at a level lower than the $4,300/bbl maximum U.S. prosecutors are seeking for environmental penalties, siding with prosecutors who had argued that regulators were instructed by Congress to raise statutory maximum fines to account for inflation.
- Barbier says he has not yet determined the actual amount of the civil penalty stemming from the Gulf of Mexico spill, which could run as high as $13.7B.
Thu, Feb. 19, 7:58 AM
- BP says oil output from its Azeri-Chirag-Guneshli oilfields in Azerbaijan was down slightly to 31.5M metric tons in 2014 from 32.2M in 2013.
- BP says the consortium spent ~$1B in operating expenditure and $2.3B in capital expenditure on ACG activities in 2014, after spending $772M in opex and $2.8B in capex during 2013.
- The results are sure to raise concerns by the government, after BP and its partner, Azeri state energy firm SOCAR, tried to calm worries about declines in oil production in 2013, saying production had stabilized.
BP vs. ETF Alternatives
BP PLC provides energy products and services. The company explores for oil and natural gas and also engages in supply and trading of crude oil, petroleum, petrochemicals products and related services.
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