Wed, May 20, 10:57 AM
- Royal Dutch Shell (RDS.A, RDS.B) joins BP in calling on European regulators to refrain from imposing stricter capital requirements and greater disclosure measures on oil trading.
- Regulators would achieve undesired effects if companies and trading houses were forced to follow stricter capital requirement rules or be limited in their ability to trade derivatives, Shell VP for trading Mike Muller says, seconding recent statements from BP trading division chief Paul Reed.
- Both BP and Shell trading divisions employ hundreds of people and trade millions of barrels of oil and refined products every day, and Shell's trading business will become even bigger when it finalizes its acquisition of BG Group.
Tue, May 19, 2:48 PM
- Environmentalists angered by the Obama administration’s approval of Royal Dutch Shell’s (RDS.A, RDS.B) broad plan for boring exploratory oil wells in the Chukchi Sea seem to have overlooked that they scored a major victory in one respect.
- The approval and newly proposed government mandates for Arctic oil development insist that Shell and other companies drilling in the region keep a second rig nearby to bore a relief well in case of a blowout, like the one that destroyed BP's Gulf of Mexico well in 2010; Shell is being forced to shave off roughly a month of precious potential drilling days to leave time to bore a relief well in case of such an emergency.
- Oil industry lobbyists fought the relief well requirement, at one point convincing a White House inter-agency review office that it is unnecessary and prohibitively expensive, but top Interior Department officials ended up winning out, insisting that it is essential to have all equipment on hand to act swiftly in case of an emergency at the remote, forbidding and often-frozen Arctic.
Tue, May 19, 12:53 PM
- Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden vows that the company will press on with its campaign to explore the Arctic for oil this summer despite protests in Seattle, and dismisses claims that Shell is using the city's port illegally.
- But Shell's annual general meeting today was dominated by questions and comments over the company's environmental track record as well as its efforts to curb carbon emissions.
- Van Beurden lambasted fossil fuel critics, saying that "carbon bubble" activists who argue that pension funds and major institutions should divest from fossil fuel companies "ignore reality."
- The CEO says the world faces an energy crisis unless investment into producing fossil fuels is maintained, as he foresees a dramatic increase in demand as 3B people emerge from poverty over the next few decades.
Tue, May 19, 7:54 AM
- Royal Dutch Shell (RDS.A, RDS.B) says it has received a $529M binding offer from Ireland's DCC Energy (OTC:DCCPF) for its Butagaz liquefied petroleum gas business in France.
- Shell says the deal is consistent with its strategy of concentrating its downstream footprint on a smaller number of assets and markets where it can be most competitive, and is part of an ongoing exit from the LPG business globally.
- DCC, which already has purchased LPG businesses from BP and Statoil, says the proposed deal would be its largest acquisition and make it Europe's third-largest LPG distributor.
Mon, May 18, 6:41 PM
- Pres. Obama is seeking to balance the need to meet oil demand and concerns about climate change as the U.S. government considers final approvals for Royal Dutch Shell’s (RDS.A, RDS.B) Arctic drilling plans, according to the State's Department's special representative for the Arctic.
- "If you go up to Alaska and speak to many Alaskans... they feel like the President is shutting down the Arctic, [but] when you talk to the environmental groups, they feel the president is opening up the Arctic," the official says.
- The Interior Department last week endorsed Shell’s plan to have two rigs drill as many as six exploratory wells in the Chukchi Sea off the coast of Alaska.
- Meanwhile, "Shell no" protesters shut down traffic for much of the day to and from the Polar Pioneer, parked at Terminal 5 at the Port of Seattle, where crews prepare the Arctic drilling rig for its trip north.
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, 3:15 AM
- Shell (RDS.A, RDS.B) may be forced to divest BG Group's (OTCPK:BRGXF) 29.25% stake in a lucrative natural-gas field in Kazakhstan called Karachaganak once Shell completes it acquisition of BG.
- The WSJ has done a bit a bit of digging in BG's 2014 annual report, or it's been pointed in the right direction, and found a deeply buried paragraph saying that the Kazakhstan government has the right to acquire the firm's stake in Karachaganak if BG is sold.
- The field, described as a "cash-cow," accounted for 15% of BG's total production volume and 9% of its $19B in revenue in 2014, and analysts value the holding at $4.4B based on an oil price of $80 a barrel.
- "It's meaningful, but it's probably not a deal breaker for Shell," says Jefferies analyst Jason Gammel.
- Kazakhstan hasn't said what it plans to do, but it has exercised pre-emption rights in the past. Shell CEO Ben van Beurden traveled to Kazakhstan last month, although the company didn't disclose the reason for the trip.
Fri, May 15, 8:19 AM
- Royal Dutch Shell (RDS.A, RDS.B) yesterday docked a 400-ft. Arctic drilling rig at its temporary home in Seattle, despite protests from environmentalists and the city's opposition.
- The Polar Pioneer is one of two rigs that Shell plans to park in Seattle until drilling season in the Arctic begins in the summer.
- Seattle's mayor says a new permit is needed for the rigs to dock but Shell believes current permits are sufficient.
- Pres. Obama says experts have convinced him that Shell has developed strong safeguards to undertake offshore oil exploration in Arctic waters.
Thu, May 14, 11:58 AM
- Royal Dutch Shell (RDS.A, RDS.B) will consider small additions to its North America oil and gas business, despite ruling out large acquisitions after its deal to buy BG Group, the director of Shell's Americas exploration and production business tells Reuters.
- The BG deal "doesn't make us shy away from a bolt-on" acquisition, Marvin Odum says, even though "it is hard to believe there is something big out there that is compelling."
- Shell has said its cash reserves are limited after the $70B BG deal, but Odum says it would consider smaller deals in North American basins where it already operates, including the Permian Basin in Texas and New Mexico, the Utica in Appalachia, and western Canada.
- While oil prices have rebounded, Odum still predicts hard times to continue for drillers and oil service firms; the prices firms can charge for drilling and fracking services have fallen by at least 30% since last year, which is squeezing revenues, Odum says.
Wed, May 13, 11:08 AM
- Royal Dutch Shell (RDS.A, RDS.B) says it has a valid lease for Seattle terminal space and plans to move its Arctic drilling rigs to the city despite the protests of activists and a port commission request that it wait.
- The Port of Seattle’s board voted yesterday to ask that the arrival of the rigs be delayed, bowing to a wave of public pressure by protesters, but the measure does not compel a delay or rescind the lease that was signed earlier this year allowing Shell to use the 50-acre Terminal 5 site near downtown.
- The vote came a day after U.S. authorities gave conditional approval for Shell to begin drilling test wells off the coast of Alaska this summer.
- Shell’s rigs are expected to arrive this week for moorage and maintenance before heading north, where the start of the drilling season could begin as soon as July 15.
Wed, May 13, 10:33 AM
- Petronas' C$1.15B ($960M) offer to compensate the Lax Kw’alaams aboriginal group for building a natural gas export terminal on its ancestral lands in British Columbia has been rejected, dealing another blow to plans to export liquefied natural gas from North America to Asian markets.
- The public should recognize that "this is not a money issue: this is environmental and cultural," the group says.
- Winning the support of indigenous groups including the 3,600-member Lax Kw’alaams is considered critical for advancing the Pacific NorthWest LNG project and other gas export plans in Canada.
- The project is one of several LNG developments proposed for the province, including from Shell (RDS.A, RDS.B), Chevron (NYSE:CVX) and Exxon (NYSE:XOM).
Wed, May 13, 8:11 AM
- Shell Midstream Partners (NYSE:SHLX) agrees to acquire additional interests in Zydeco Pipeline and Colonial Pipeline from a subsidiary of Royal Dutch Shell (RDS.A, RDS.B) for $448M.
- SHLX says the acquisition will increase its ownership interest in Zydeco to 62.5% from 43% and in Colonial to 3% from 1.612%.
- SHLX expects the deal to be immediately and strongly accretive to distributable cash flow per unit.
- To help fund the deal, SHLX launches a private placement of 7.69M common units
- Earlier: Shell Midstream Partners beats by $0.01, misses on revenue
Mon, May 11, 2:42 PM
- Royal Dutch Shell (RDS.A, RDS.B) wins approval from the U.S. Interior Department to resume oil exploration this year in the Chukchi Sea off Alaska’s Arctic coast, provided it obtains all necessary permits from other state and federal agencies and comply with endangered species rules.
- Shell's revised plan proposes drilling up to six wells within the Burger Prospect, located in ~140 ft. of water.
- The Chukchi and Beaufort Seas may contain 24B barrels of oil, according to the U.S. Geological Survey.
Mon, May 11, 8:19 AM
- Royal Dutch Shell (RDS.A, RDS.B) says it is postponing the startup of the Carmon Creek oil sands project in Alberta until 2019, about two years later than initially planned, while it works to wring cost savings from suppliers.
- Shell is tweaking the design of the steam-driven project and has re-tendered some contracts as it seeks to lower the price tag for the development’s initial two phases.
- The delay comes after Shell deferred investment in future phases of the development as part of a company-wide effort to cut US$15B from its budget over three years.
Fri, May 8, 8:12 AM
- Royal Dutch Shell (RDS.A, RDS.B) and BP post solid gains in London trading following after Prime Minister Cameron’s Conservative Party swept to an unexpectedly strong U.K. election victory.
- In U.S. premarket trading: RDS.A +2.8%, BP +2.3%.
- However, Shell investors could start to think the company has overpaid in its £47B ($70B) deal for BG Group (OTCPK:BRGXF, OTCQX:BRGYY) after the latter released Q1 earnings that fell 41% Y/Y to £1.03B ($1.59B), including a 56% revenue drop in BG's E&P segment.
Thu, May 7, 3:44 PM
- Money manager Jim Chanos slams Royal Dutch Shell's (RDS.A, RDS.B) $70B deal for BG Group (OTCPK:BRGXF, OTCQX:BRGYY) and considers it an opportunity to go short.
- Chanos tells the SALT conference that BG is plagued with high replacement costs and high leverage to cover dividends and buybacks, and he believes the company's capital does not cover spending even before dividends.
- Shell is making a bet on BG's liquefied natural gas business and ties with Brazil's Petrobras (NYSE:PBR), but Chanos challenges the wisdom of the deal's foundation.
- On the LNG business, "What most people don't know is that for the last three years LNG demand has been basically flat... Capacity, however, is going to skyrocket in the next five years."
- Chanos says demand for LNG is already shrinking in places such as Japan, a dim view which also has prompted him to short Chevron (NYSE:CVX).
- On PBR, "the corruption [is] much deeper than we thought. They have problematic issues," and "it is interesting that the stock has also bounced around oil. The numbers are grim.”
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