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Royal Dutch Shell plc (RDS.B)

  • Jan. 6, 2014, 4:47 PM
    • Royal Dutch Shell (RDS.A, RDS.B) and BP reportedly are considering the sale of refineries and gasoline stations in Australia to free up cash.
    • Shell is in preliminary talks with two parties about a A$3B ($2.69B) sale of 900 gas ­stations and its refinery in Geelong, according to the Australian Financial Review; BP is said to be examining a A$3B sale of its gas stations and refineries in Queensland and Western Australia.
    • The report also speculates that Chevron (CVX) may follow BP and Shell and sell out of its Australian service stations.
  • Jan. 2, 2014, 3:58 PM
    • Woodside Petroleum (WOPEF, WOPEY) says the Mitsui-Mitsubishi joint venture has scrapped a deal to buy natural gas from Woodside's Browse development after at least two years of delays.
    • The Japan-Australia LNG venture had agreed in 2012 to buy ~1.5M metric tons of liquefied natural gas each year from Browse, part of a $2B deal that gave the consortium 15% of the project.
    • Woodside and its partners - including Shell (RDS.A, RDS.B) and BP - abandoned plans for a $40B onshore LNG development because of cost, and are now considering processing natural gas at sea but likely won't make a decision until H2 2015.
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  • Jan. 2, 2014, 11:51 AM
    • The giant Kashagan oil field, which was brought to a halt by leaks shortly after start-up last year, is grappling with a bureaucratic "nightmare" on top of its engineering troubles as it strives for commercial production in 2014, according to a Reuters report.
    • The scale and complexity of the project, which has cost ~$50B so far, led its partners - which include Exxon (XOM), Shell (RDS.A, RDS.B), Total (TOT) and Eni (E) - away from the traditional single operator command-and-control model, where one of the larger companies takes charge while others provide support and share risks, costs and rewards.
    • Commercial production could still be many months away, and engineering difficulties have exposed the weaknesses of the cumbersome administrative structure, which will stay in place until oil is flowing properly.
  • Jan. 2, 2014, 8:10 AM
    • Royal Dutch Shell (RDS.A, RDS.B) completes its acquisition of Repsol's (REPYY, REPYF) liquefied natural gas portfolio outside North America for $3.8B net, less than the $4.4B originally agreed last February.
    • The purchase price was amended to include the exercise of pre-emption rights of the BBE power plant in Spain by an existing partner, as well as other adjustments such as the financial performance of the portfolio and working capital movements since Oct. 1, 2012.
    • Shell says the deal, which includes the sale of plants in Peru and Trinidad and Tobago, substantially increases the shipping capacity available to its LNG marketing business and will contribute additional cash flow.
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  • Dec. 30, 2013, 1:01 PM
    • Royal Dutch Shell (RDS.A, RDS.B) and India's ONGC close their purchase of a 35% stake from Petrobras (PBR) in the Parque das Conchas field in Brazil's Campos basin.
    • The deal precludes Petrobras' intended sale of its stake to China's Sinochem for $1.54B; operator Shell will own a 73% interest, up from 50%, and ONGC will have 27%, up from 15% in the heavy-oil development in the BC-10 block
    • The deal is the latest in a series of planned sales as part of PBR's $9.9B divestment program announced earlier in 2013.
    • Parque das Conchas is producing ~50K boe/day following the start-up of a second phase in October.
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  • Dec. 24, 2013, 8:51 AM
    • Imperial Oil (IMO) has told regulators the estimated cost of its long-delayed Mackenzie Valley project has increased more than 40% to at least $20B since its last tally almost seven years ago, and that it has no idea when North American gas markets might turn around to rescue the project from limbo, the Globe and Mail reports.
    • IMO is studying the potential for Mackenzie gas to fit into a broader strategy to feed liquefied natural gas export plants on Canada’s west coast, though that could be years off.
    • IMO’s partners in the Mackenzie project are Royal Dutch Shell (RDS.A, RDS.B), ConocoPhillips (COP), Exxon Mobil (XOM) and the native-owned Aboriginal Pipeline Group; IMO is controlled by XOM.
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  • Dec. 23, 2013, 3:38 PM
    • Royal Dutch Shell (RDS.A, RDS.B) will start selling up to $30B of assets (£18B) next year, including a $7B stake in Woodside Petroleum (WOPEF, WOPEY), oil assets in the Niger Delta worth $2B and other assets totaling $20B, according to oil and gas analysts from JP Morgan Cazenove.
    • The disposal plan could be unveiled as early as late January and would representing ~17% of Shell’s $178B total net assets, The Telegraph reports.
    • Weak refining margins and oil theft in Nigeria caused a sharp fall in Shell's profits this year.
  • Dec. 19, 2013, 6:27 PM
    • El Paso Pipeline Partners (EPB) and Royal Dutch Shell (RDS.A, RDS.B) say they will move forward with a $500M expansion to export more liquefied natural gas from the Elba Island terminal near Savannah, Ga.
    • The expansion will give the plant additional capacity to liquefy 70M-140M cf/day of natural gas, ultimately reaching 350M cf/day (2.5M metric tons/year) when service begins in 2017 or 2018.
    • The project's overall price tag is now $1.5B, EPB says.
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  • Dec. 18, 2013, 2:26 PM
    • Eni (E +0.9%) strikes a deal with Dutch firm GasTerra for long-term natural gas supplies at a lower price, as it renegotiates contract terms with various companies amid weaker demand in Europe.
    • Earlier this year, Eni threatened to take GasTerra, in which Shell (RDS.A, RDS.B) and Exxon (XOM) each own a 25% stake, to arbitration over contracts it said made long-term gas supplies unprofitable.
    • Eni is in arbitration with Statoil (STO) as it seeks changes to how much it pays for gas, but the outcome isn't expected for many months.
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  • Dec. 16, 2013, 5:58 PM
    • Royal Dutch Shell (RDS.A, RDS.B) will team up with Caterpillar (CAT) to deploy new technology in its mining trucks operating in Canada’s oil sands fields, running them mostly on liquefied natural gas instead of diesel.
    • The switch will cut fuel costs while also having the benefit of lowering emissions in oil sands operations, which involve higher emissions than other forms of oil production.
    • CAT is in the midst of an effort to build new engines for its enormous mining trucks, which often run 24 hours daily and consume huge quantities of fuel.
  • Dec. 16, 2013, 11:28 AM
    • Royal Dutch Shell’s (RDS.A, RDS.B) long-awaited sale of its $6.4B stake in Woodside Petroleum (WOPEF, WOPEY) may open the door for Asian buyers to grab a slice of Australia’s second-largest oil and gas producer, or even the whole company, Bloomberg speculates.
    • Shell, which sees its 23% holding in Woodside as “increasingly non-core," may exit its stake as soon as next year; while Shell may opt to sell the stock back to Woodside and institutional investors, China’s Cnooc (CEO) and Sinopec (SNP) might pursue the stake or a full takeover.
    • Government opposition to a foreign takeover may have eased since Shell was blocked in 2001, analysts say, and the company is more affordable after its multiple to cash flow has been more than cut in half since 2011.
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  • Dec. 13, 2013, 3:43 PM
    • ExxonMobil (XOM) appears set to pull out of exploration in Arctic waters off Greenland and was not among bidders in the country’s latest licensing round, with block awards likely to be issued soon, Upstream reports.
    • Keen competition is expected for the frontier tracts which cover nearly 50K sq. km and estimated to hold potential resources of 31B boe; bidders believed to be in contention include BP, Shell (RDS.A, RDS.B), Chevron (CVX) and Statoil (STO), but XOM apparently will not participate.
    • Despite the resource promise, the Greenland blocks would require spending of ~$500M on seismic surveys and drilling of up to two exploration wells.
  • Dec. 12, 2013, 10:25 AM
    • Tucked away inside Chevron's (CVX -0.6%) announced $39.8B 2014 capex budget is another cost blowout on the development of its Gorgon LNG project in Australia: The latest estimated cost is $54B, vs. a $52B estimate offered a year ago and $37B when the final investment decision was taken in 2009.
    • The timetable for first gas from Gorgon, which will have the capacity to produce 15.6M metric tons/year, slips to Q1 2015 from the original 2014 target.
    • CVX says the project's economics remain attractive, following a sharp increase in oil prices since construction began; Gorgon's Asian customers are locked into contracts typically lasting 20 years that are linked to the fluctuating price of oil.
    • Operator CVX owns 47.3% of Gorgon, while Shell (RDS.A, RDS.B) and Exxon Mobil (XOM) each hold 25%.
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  • Dec. 10, 2013, 5:56 PM
    • Royal Dutch Shell's (RDS.A, RDS.B) Argentine unit plans to triple shale investments to $500M as it eyes a change in the government's energy policies to spur development of the Vaca Muerta formation and cut fuel imports.
    • Argentina will need $300B to develop Vaca Muerta in a six-year period that would make the country oil sufficient starting in 2020 and keep producing for as many as 40 years, Shell Argentina's CEO says.
    • Shell has four wells in production at Vaca Muerta, is drilling two more and says it is analyzing opportunities to increase its shale acreage.
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  • Dec. 7, 2013, 11:36 AM
    • "The S&P 500 index is up 27% this year, but its underlying revenue increased just 2.9% during the third quarter," Jack Hough writes, adding that if you want real top-line growth (i.e. not derived from acquisitions and not simply the product of a bounce off "depressed levels") you have to pay 30, 50, or even 100 times earnings.
    • Thankfully, "fast growth isn't the only path to handsome stock returns," Hough continues, before recommending investors look to "reasonably priced companies with plenty to sell."
    • Making the list are: General Electric (GE), Dow Chemical (DOW), Royal Dutch Shell (RDS.B), and Time Warner (TWX).
  • Dec. 6, 2013, 10:50 PM
    • Canada's government approves a major expansion of the Jack Pine oil sands mine operated by Royal Dutch Shell (RDS.A, RDS.B), despite an environmental review that warned of severe and irreversible damage.
    • The decision clears the way for Shell to raise production at the Alberta mine by 100K bbl/day, bringing total output at the joint venture with Marathon Petroleum (MPC) and Chevron (CVX) to 300K bbl/day; the mine is part of the larger Athabasca oil sands project, which has current production capacity of 255K bbl/day.
    • Shell says it hasn't made a final investment decision on moving ahead with the expansion but is reviewing the government's terms.
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Company Description
Royal Dutch Shell PLC is an integrated oil & gas company. The Company explores for & extracts crude oil, natural gas and natural gas liquids. It also liquefies and transports gas.