Wed, Sep. 2, 10:19 AM
- Cnooc's (CEO -0.4%) Nexen Energy is shutting down its Long Lake oil sands operations in Alberta as it complies with a pipeline suspension order from the province's energy regulator.
- Nexen estimates the shutdown process would take up to two weeks as it suspends pipeline operations and attempts to demonstrate to the regulator that its pipelines are safe.
- Before last month's spill that has turned out to be one of the largest-ever oil-related pipeline spills on North American soil, Long Lake was producing ~50K bbl/day of bitumen which is upgraded on site into refinery-ready synthetic crude.
Tue, Sep. 1, 7:55 AM
- The oil sands-related cutbacks in Alberta announced (I, II) by Canadian Oil Sands (OTCQX:COSWF) and Cnooc's (NYSE:CEO) Nexen Energy could affect oil exports to the U.S. in the long run and already have raised prices in the short term, WSJ reports.
- Neither company offered specifics on production or how long the shutdowns would last, but prices for Canadian synthetic crude oil rallied in trading Monday amid concerns about a drop in shipments from Syncrude and Nexen.
- Light synthetic crude from the oil sands for September delivery jumped to a one-month high of $1/bbl below the West Texas benchmark, rallying from $4.50/bbl below WTI on Friday.
- The impact on Canada’s crude production and pricing will depend on the duration of the outages; “It all comes down to how long these facilities are down and out, “ says Kevin Birn, a director in charge of oil sands analysis at IHS Energy.
Mon, Aug. 31, 7:24 AM
- Alberta’s energy regulator over the weekend ordered Cnooc's (NYSE:CEO) Nexen Energy subsidiary to immediately suspend operations of 95 pipelines in northern Alberta for non-compliance surrounding pipeline maintenance and monitoring in its Long Lake oil sands project.
- The suspension order comes amid an investigation into an accident reported in July involving a ruptured pipeline at Long Lake that spilled 31.5K barrels of crude oil, wastewater and sand, which forced Nexen to halt production of 9K bbl/day of heavy oil and raised questions about the safety of its operations.
- It is unclear how production might be affected by the suspension; Long Lake continued to produce ~50K bbl/day and run its facility for processing heavy crude even after the leak that shut-in production at its Kinosis 1A site.
Mon, Aug. 31, 7:12 AM
- Canadian Oil Sands (OTCQX:COSWF) says it has halted crude oil production at the Syncrude oil sands project after a fire damaged equipment at its processing facility in northern Alberta on Saturday.
- COSWF says the main coker conversion units were not damaged and Syncrude continues to operate, but it has suspended synthetic crude oil production and is currently developing a recovery plan.
- The company does not estimate the volume or value of lost production, but Syncrude’s synthetic crude output averaged 207.7K bbl/day in Q2.
- COSWF holds a 37% stake in Syncrude, and six other companies own the rest, including lead operator Exxon Mobil (NYSE:XOM) unit Imperial Oil (NYSEMKT:IMO), Suncor Energy (NYSE:SU), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO) subsidiary Nexen.
Fri, Aug. 28, 2:28 PM
- Alberta's new government launches its royalty review panel, and says it will not raise oil and gas royalty rates until the end of 2016.
- The specter of a higher government take is spooking the industry, especially with oil prices recently hitting more than six-year lows; some have argued the royalty review should be deferred until the outlook improves, while others would prefer to just get it over with.
- Related tickers: SU, ENB, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
Thu, Aug. 27, 1:53 PM
- Cnooc (CEO +13.5%) soars to its largest one-day gain in the last decade after reporting an H1 earnings decline that beat market expectations and increasing its payout ratio, prompting Credit Suisse to upgrade shares to Outperform from Neutral.
- The firm points to CEO's 62% dividend payout vs. 27% in H1 a year ago, the company's H1 total Y/Y production increase of 13.5%, and a "spectacular" cost-cutting effort which resulted in a 19% Y/Y decline in operating expenses and 35% decline in SG&A, as top reasons for the upgrade.
- But Heard On The Street's Abheek Bhattacharya writes that such a high payout is not sustainable when Brent crude has fallen 16% in the past month and is now worth ~$45/bbl; CEO requires Brent at $46 just to break even in H2, Jefferies analysts say.
Wed, Aug. 26, 8:18 AM
- Chinese offshore oil producer Cnooc (NYSE:CEO) says its consolidated H1 net profit fell 56% Y/Y to 14.73B yuan ($2.3B) from 33.6B yuan a year ago, as a precipitous drop in crude prices offset higher production.
- Cnooc's H1 net production of oil and gas rose 13.5% Y/Y to 240.1M boe, but production in Canada, where its Nexen subsidiary operates, fell 15% to 10.5M boe.
- Cnooc reiterates plans to increase full-year production by as much as 15% to as high as 495M boe, while cutting capex by as much as 35% to 70B yuan.
- The company cut H1 capital spending by 31%, “in line with guidance, reflecting increased capital discipline in a challenging commodity price environment,” says Bernstein's Neil Beveridge.
Thu, Aug. 13, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Wed, Aug. 12, 12:27 PM
- Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
- The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
- At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
- The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
- Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
Wed, Aug. 12, 10:15 AM
- Syncrude is facing an environmental protection order following the deaths of 30 great blue herons at an abandoned sump pond at its Mildred Lake mine site near Fort McMurray, Alberta.
- Although bird deterrents were working elsewhere on the mine site, Syncrude says no such equipment was in operation at the sump.
- Syncrude was fined $3M in 2008 when more than 1,600 ducks died after they landed on a company tailings pond.
- Canadian Oil Sands (OTCQX:COSWF) owns 37% of Syncrude, with stakes also held by lead operator Imperial Oil (NYSEMKT:IMO), Suncor (NYSE:SU), Murphy Oil (NYSE:MUR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO).
Mon, Aug. 10, 5:53 PM
- Kenya and Uganda reach agreement on the route of a planned oil pipeline to the Indian Ocean, ending months of debate on the link that will export crude from companies including Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY).
- The planned $4.5B, 930-mile pipeline will allow Tullow to start exports from joint ventures with Total (NYSE:TOT) and Africa Oil; China’s Cnooc (NYSE:CEO) also is a partner in Uganda.
- While oil was discovered in Uganda in 2006 and four years later in Kenya, both are still in the planning stage of commercial development; Uganda has estimated oil finds of 6.5B barrels and Kenya at 600M barrels.
Tue, Aug. 4, 7:15 PM
- The first oil from a long-duration output test in Brazil's giant Libra offshore area now is projected to flow in Q1 2017 instead of H2 2016, says Odebrecht Oil & Gas, which will operate the test platform with Teekay Offshore Partners (NYSE:TOO).
- The later startup date could be one the first signs that Petrobras (NYSE:PBR), which manages exploration in Libra, may be having trouble meeting targets in its $130B 2015-19 strategic plan.
- PBR owns a 40% stake in E&P rights to Libra, one of the largest oil discoveries of the past three decades; Total (NYSE:TOT) owns 20%, Royal Dutch Shell (RDS.A RDS.B) 20%, and 10% each for Chinese state oil companies Cnooc (NYSE:CEO) and China National Petroleum (NYSE:PTR).
Mon, Aug. 3, 12:24 PM
- PetroChina (PTR -2.3%) has turned into a speculative bet on how much money the Chinese government is plowing into the stock market that day, resulting in a surge in volatility to the highest level among the world’s 100 biggest companies and topping 95% of the stocks in the Russell 2000 index, according to a Bloomberg analysis.
- PTR’s top weighting in the benchmark Shanghai Composite Index makes it an ideal target for funds trying to influence the broader market, the report says.
- PTR shares have shed 25% in the past three months, while Sinopec (SNP -1.5%) and Cnooc (CEO -1.2%) have lost a respective 22% and 29% during the period.
Tue, Jul. 28, 1:12 PM
- Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
- A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
- The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
- Related tickers: TRP, ENB, SU, IMO, CNQ, CVE, TCK, OTCPK:HUSKF, OTCQX:COSWF
Fri, Jul. 17, 5:54 PM
- As exploration costs fall, Morgan Stanley's emerging markets analysts see the most upside for China's Cnooc (NYSE:CEO), Argentina's YPF and India's ONGC.
- Cnooc boasts the third-largest production growth rates among emerging markets E&P players, the highest realized oil prices and lowest costs within China's top three oil companies, and better production and development know-how than PetroChina (NYSE:PTR) and Sinopec (NYSE:SNP) on offshore reserves, Stanley says.
- YPF's current valuation is attractive due to the near-term growth of the existing asset base, leaving a sizable unconventional upside as a free option, and forex pass-through in fuel prices has been working over the past five months and protecting margins, the firm says.
- Stanley suggests avoiding Gazprom (OTCPK:OGZPY), Ecopetrol (NYSE:EC) and Petrobras (NYSE:PBR), which it calls its least favorite stock as the company will continue to generate negative free cash flow through 2018 and cash flows primarily will service bondholders to the detriment of equity holders.
Thu, Jul. 16, 8:39 PM
- Nexen, the Canadian company that was taken over by China’s Cnooc (NYSE:CEO) a few years ago, reported a spill of ~31K barrels of emulsion in Alberta's oil sands region after a pipeline failure, according to the Alberta Energy Regulator.
- The source of the release has been effectively stopped, and there have not been any reports of impacts on wildlife, the regulator says.
- Nexen says it has started its emergency response plan and has begun cleaning up the area affected by the spill of crude oil, sand and water.
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