Today, 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.
Today, 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.
Tue, May 12, 7:51 AM
- Statoil (NYSE:STO) is establishing a unit for renewable energy solutions, as newly established CEO Eldar Saetre shakes up his management team.
- New Energy Solutions will be led by executive VP Irene Rummelhoff, formerly head of exploration in Norway, and Hans Jacob Hegge will replace Torgrim Reitan as CFO; Reitan, who has served five years as CFO, will become new executive VP for development and production in the U.S.
- STO’s renewable business, which also includes carbon capture and storage projects, previously was part of a unit that also included marketing and processing.
- STO +1.1% premarket.
Mon, May 11, 10:56 AM
- Statoil (STO -1.2%) is keeping a close watch for acquisition opportunities after the crash in crude prices, CFO Torgrim Reitan tells Bloomberg while adding that "high-quality are still not cheap."
- At the same time, STO remains focused on exploration and has no gaps in its portfolio of investment opportunities, Reitan says; STO plans to spend $3.2B on exploration this year, down from $3.5B last year, while it is cutting total capex to $18B from $20B.
- Shell’s acquisition of BG has sparked speculation of a new wave of consolidation, mirroring the aftermath of an oil price slump in the late 1990s, but the CFO says it remains unclear what the deal means for the industry.
Thu, Apr. 30, 3:25 PM
- BP (BP -0.8%) says production has started at the Kizomba Satellites phase 2 development in Block 15 offshore Angola, in the first of its planned start-ups for 2015 to be followed up later in the year with the Greater Plutonio phase 3 project in neighboring Block 18.
- The project develops 190M barrels of oil with peak production estimated at 70K bbl/day, and is expected to increase total Block 15 production to 350K bbl/day.
- The project is operated by Exxon Mobil (NYSE:XOM) with a 40% interest, BP has a 26.67% stake, Eni (NYSE:E) has 20% and Statoil (NYSE:STO) has 13.33%.
Thu, Apr. 30, 7:49 AM
- Statoil (NYSE:STO) +2.2% premarket after swinging to a surprise Q1 loss on a writedown in the value of its U.S. shale business but maintaining its dividend.
- STO wrote down the value of its assets by 46.1B kroner ($6.11B) in the quarter, with U.S. unconventional assets in the Bakken, Eagle Ford and Marcellus taking a 30.5B kroner hit and the remaining from international conventional assets, mainly in the Gulf of Mexico.
- But the results were "robust... in the context of quite low expectations," Jefferies analysts say: Q1 adjusted operating profit of 22.9B kroner was ahead of forecasts for 16.4B as STO's exploration and refining businesses both performed better than expected, output beat forecasts and cash flow covered nearly all of its relatively high investment spending.
- High spending remains a concern as STO plans to invest $18B this year, making the smallest spending cut among any of the majors.
Thu, Apr. 30, 1:27 AM
Mon, Apr. 27, 9:56 AM
- Statoil (STO +1.3%) must move ahead with the delayed expansion of the Snorre oil and gas field in the North Sea because it is a time-critical investment, Norway's energy minister says.
- STO last month delayed a decision on the $4B Snorre upgrade, which could yield an additional 300M barrels of oil, saying margins on the project were too low, particularly after the recent drop in crude prices; STO expects to decide in late 2016 whether to move ahead with building a new platform and extending the field's lifetime to 2040.
- Exxon Mobil (NYSE:XOM) owns a 17.4% share of Snorre.
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.
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