UK increases windfall taxes on North Sea Oil and Gas Producers
Finance Minister Rachel Reeves said on Wednesday that the British government would increase its windfall tax for North Sea oil-and-gas producers from 35% to 38% and extend it by one year. Reeves, who presented the first budget of the new Labour Government, said that the increase in the windfall tax - also known as the Energy Profits Levy - will come into effect on November 1. The headline tax rate for oil and gas activity is now 78%. This is among the highest rates in the world. The duration of the law will be extended an additional year, until March 2030.
Baker Hughes will supply pipe systems for Brazil's Petrobras
Baker Hughes, a provider of oilfield services, announced on Monday that it had signed an agreement with Petrobras to provide 77 kilometers (47.85miles) of flexible pipe system for Brazil's Santos Basin pre-salt field. Santos Basin, an offshore oil and gas-rich region off Brazil's southeast Atlantic coast. The basin is the largest in the country and has attracted major investment from oil and gas producers around the world including Shell, CNOOC, and TotalEnergies. Baker Hughes' agreement with Petrobras to provide flexible pipes systems and oilfield services, signed in April, is the latest Baker Hughes contract this year.
Shares of US energy companies rise as Middle East crisis fuels supply concerns
The shares of U.S. Energy companies rose in premarket trading on Wednesday. This was due to the rise in oil prices, which was a result of concerns about a possible escalation in tensions in Middle East. The markets went into a risk off mode after the announcement. The demand for safe-haven currencies such as the Japanese yen, Swiss franc and oil stocks was strong. Benchmark Brent crude rose by 2.8% to $75.59 per barrel while U.S. crude climbed 3% to $71.92. Matthew Ryan, director of Ebury's market strategy, said that the involvement of Iran was a worrying development for the markets.
Sources say that the owner of energy producer Maverick is interested in selling it for $3 billion.
According to sources familiar with the situation, the private equity owner of Maverick Natural Resources has been exploring the possibility of selling the U.S. oil-and-gas producer for a price that would be around $3 billion including debt. Sources said that the Houston-based exploration company, owned by the energy-focused investment group EIG, was working with Jefferies investment bankers on the sale process. They requested anonymity because the discussions were confidential. Sources said that potential buyers such as oil and gas producers, other investment firms would be required to assume nearly $800,000,000 of Maverick’s debt.
Occidental Petroleum Jumps into Acquisition Mode
Occidental Petroleum said on Monday it would buy energy producer CrownRock in a cash-and-stock deal valued at $12 billion including debt, expanding in the lucrative Permian basin.Investors are pressing oil and gas producers to expand their inventories following Exxon Mobil's $60 billion deal for Pioneer Natural Resources and Chevron's $53 billion agreement for Hess in October.Occidental will finance the purchase of privately-held oil and gas producer CrownRock with $9.1 billion of new debt, the issuance of about $1.7 billion of common equity…
US Energy Firm Payouts to Oil Investors Top Exploration Spending for First Time
Top U.S. energy companies last year paid out more of their earnings to shareholders than they invested in new oil and gas fields for the first time, according to a report released on Tuesday.The outlook for stronger energy prices has not changed the focus on investor returns from the U.S. industry, according to the report's authors, Ernst & Young LLP. U.S. energy companies have been focused on regaining favor with investors after years of overspending on production growth hurt returns and put them in the doghouse.The returns focus has lifted the energy sector to about 4.5% of the S&P 500's market valuation…
Asian Countries Looking to Release Oil Reserves after U.S. Request
The world's biggest economies said on Thursday they were looking into releasing oil from their strategic reserves, following a rare request from the United States for a coordinated move to cool global energy prices.The U.S. move reflects frustration with the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia who have rebuffed Washington's requests to speed up oil production as the world economy rebounds from the pandemic.It also comes as U.S. President Joe Biden fends off political pressure ahead of midterm…
Shell, Eni Lead Oil Majors' Climate Ambitions But Still Fall Short - Investors
None of the big oil companies currently meet U.N. targets to limit global warming despite the most ambitious targets set by Royal Dutch Shell and Eni , investors managing $19 trillion said on Tuesday.The Transition Pathway Initiative (TPI), which represents the investors and is co-chaired by the Church of England Pensions Board, called on all oil and gas producers to set both intensity-based and absolute emissions reductions targets so that the industry adheres to a common standard on 'net zero' emissions.Burning of oil and gas accounts for the vast majority of the world’s carbon emissions.
More Disruption and Uncertainty in Store for Petrochemicals
The impact of the coronavirus lockdowns on the oil, gas and chemicals industries’ integrated value chains is radically shifting relationships and profitability.It is also making planning virtually impossible, as BASF suggested last week.The environment around refining and chemical margins remains challenging, Shell CEO Ben van Beurden also said this week.“The key to the profitability of our chemicals plants and refineries is their integrated value chain from their feedstocks to the multiple products they produce,” he said.“The demand volatility of a particular product can have a broader impact on the operational capability of the integrated value chain.
Oilfield Equipment and Services Spending to Fall to 2005-Low
Global spending on oilfield equipment and services this year will fall 21% from 2019 to $211 billion, the lowest level since 2005, according to a report to be released on Wednesday by consultancy Spears & Associates, as oil and gas producers slash spending.The decline comes as the coronavirus pandemic has crushed oil and gas demand, and Saudi Arabia and Russia pump full bore in a grab for market share that has shale producers reeling. U.S. oil futures fell 54% for the month of March, to $20.48 a barrel on Tuesday, below U.S. producers' cost of production.Spears' estimate for 2020 spending is below industry outlays at the nadir of the last price crash in 2016…
Russia Leads E&P Race in Arctic Region
Russian and Norwegian exploration and production (E&P) operators have been expanding their operations in the Arctic continental shelf, which is estimated to hold vast deposits of hydrocarbons and rare earth minerals.Warming temperatures in the Barents Sea and northern coastline of Russia are giving an added impetus to resource development in this region, according to GlobalData.GlobalData's report, ‘Arctic Exploitation’, discusses how Russia is keen on hydrocarbon appraisal and development from the Arctic region to such a great extent that…
Oilfield Services Giants Start Year with Asset Sales
Schlumberger, Halliburton Co, and Baker Hughes Co have kicked off the new year by putting units up for sale, as the three largest names in oilfield services seek to reshape their businesses and adjust to falling demand.Oilfield service providers are facing reduced spending by oil and gas producers as investors push for higher shareholder returns rather than more drilling activity. Competition also is forcing service companies to exit less profitable businesses. The trio, which hold about 26% of the global oilfield services market, according to consultancy Spears & Associates, recently disclosed plans to review operations in light of declining demand for their services.
China to Launch State Pipeline Group
China plans to launch its long-awaited national oil and gas pipeline company on Monday, part of a sector-wide reform aimed at providing fair market access to infrastructure and boost investment in oil and gas production.Most of the country's pipeline infrastructure is controlled by energy giant PetroChina, CNPC's listed arm, and small, non state-owned oil and gas producers and distributors often don't have access to the pipelines at competitive rates, analysts have said.This also hinders companies from investing in oil and gas exploration as they are concerned about access to the pipelines.Beijing started considering reforming the sector nearly a decade ago to improve acc
Energean Targets Net Zero Carbon Output by 2050
Mediterranean-focused oil and gas producer Energean has joined a U.N.-backed initiative and committed to reducing its net carbon emissions to zero by 2050, its chief executive said on Monday.Oil and gas producers have come under heavy pressure in recent years to tackle greenhouse gas emissions as the world battles climate change.Energean's pledge came as the 25th annual United Nations Climate Change Conference — also known as COP 25 — begins in Madrid.The company said in a statement it was the first London-listed oil and gas exploration and production company to commit to the UN's efforts to limit global warming to 1.5 degrees Celsius above pre-industrial levels."We're do
Investors Brace for Poor US Shale Earnings
Investors are bracing for weaker results from U.S. shale players in coming days as lower oil and natural gas prices and cost-cutting measures have weighed on third-quarter operations.Major shale producers ConocoPhillips and Concho Resources this week kick off quarterly earnings reports for a group whipsawed this year by volatile pricing and investor demands for improved returns. Oil and gas producers have cut drilling and slashed jobs amid worries over pricing outlooks.U.S. oil prices are down 17% and natural gas is down about 31% from a year ago, undercutting production increases.
Halliburton Promises Cost Cuts
Halliburton Co on Monday promised more cost cuts after reporting a bigger-than-expected drop in quarterly revenue as the oilfield services looks to counter weak demand from North American shale producers, sending its shares up about 7%.The biggest hydraulic fracking services provider, which earlier this month cut 650 jobs in North America, said it would take steps over the next few quarters that will lead to $300 million in annualized cost savings.Oilfield service providers are struggling with reduced spending by oil and gas producers as investors…
Schlumberger Profit Beats Estimates
Schlumberger NV beat Wall Street estimates for profit on Friday, in the first quarter under Olivier Le Peuch, as higher international drilling activity boosted demand for its equipment and services and helped counter weakness in North America.The international business has been a bright spot for the world's largest oilfield services provider since last year as investor pressure to improve returns has forced North American oil and gas producers to rein in drilling new wells in a volatile price environment.Le Peuch, who took charge in July, has outlined plans to accelerate digital investments…
U.S. To “Drown The World” In Oil
A staggering 61% of the world’s new oil and gas production over the next decade is set to come from one country alone: the United States.According to a report by Global Witness, the sheer scale of this new production dwarfs that of every other country in the world and would spell disaster for the world’s ambitions to curb climate change – the effects of which we’re already witnessing through massive heat waves, flooding, and extreme weather.Earlier this year, we crunched the numbers from the latest climate science and industry forecasts and…
NOV Cuts Staff for Second Time This Year
Oilfield equipment and service provider National Oilwell Varco has begun trimming its workforce for the second time this year, two people familiar with the matter said this week, as oil producers cut spending budgets.The Houston, Texas-based company last quarter rolled out a voluntary early retirement program and said it was reorganizing operations to reduce costs as part of a broader restructuring plan. The latest cuts, which are already underway, are in addition to those job reductions, the people said.Newer staffing cuts are aimed at eliminating redundant functions within the company, such as marketing or recruitment, one person said.
Hess Corp Posts Smaller Quarterly Loss
Hess Corp reported a smaller-than-expected quarterly loss on Wednesday, helped by lower exploration costs and a surge in output in its Bakken shale and Gulf of Mexico assets that also prompted the company to raise its 2019 production forecast.The company also cut its full-year spending plans by $100 million to $2.8 billion against the backdrop of increased investor pressure to boost shareholder returns.Hess' shares rose 6.3%, the second-biggest percentage gainer on the S&P 500 Energy Index.Oil output in the United States has soared in recent years…
