After three delays, Statoil ASA must make a decision to move ahead with the Johan Castberg oil project in Norway’s Arctic next year as planned, the Norwegian government’s oil company said.
The UK’s North Sea oil industry is suffering more than any other from the slump in crude, according to Ian Wood, whose family founded oil-services group Wood Group Plc.
The pressure is building on North Sea drillers starved of contracts as Statoil ASA deepens cuts in investment to cope with a collapse in crude prices.
Royal Dutch Shell Plc has failed to clean up four oil-spill sites in the crude-producing Niger River delta, three of which an under-resourced Nigerian regulator dealing with leakages said had been decontaminated, Amnesty International said in a report on Tuesday.
Crude dropped from a two-week high as Russian production climbed and new data on Chinese manufacturing signaled a slowdown in demand. Futures fell as much as 2.2 percent in New York. Russian oil output broke a post-Soviet record in October for the fourth time this year, while Iran said it will tell OPEC next month of its plans to raise production by 500,000 barrels a day. China’s purchasing managers index remained at 49.8 in October, the National Bureau of Statistics said Sunday, compared with an estimate of 50, the line between expansion and contraction.
Hedge funds betting oil would sink toward $40 a barrel missed the biggest rally in eight weeks. Money managers’ short positions in West Texas Intermediate crude jumped 24 percent in the week ended Oct. 27, according to data from the Commodity Futures Trading Commission. Net-long positions declined 15 percent, the most since July. Oil surged after a government report on Oct. 28 showed that US refiners came back from seasonal maintenance faster than expected, boosting crude demand. Prices slipped to a the lowest level since August before the data’s release on concern that oil companies aren’t cutting production fast enough to stem a global oversupply.
Spend the afternoon strolling through Riyadh’s shiny shopping malls, or an evening at one of its luxury restaurants, and you’d never guess there’s an oil slump. That’s not an accident, it’s Saudi policy in action. Sharing oil wealth with the public has helped keep the Al Saud family securely in power as turmoil sweeps the region. When the revenue slows down, as it’s doing now, the kingdom’s rulers would rather run huge budget deficits than risk tampering with that bedrock social contract. Eventually, economists say, something may have to give. The International Monetary Fund predicts a fiscal gap exceeding 20 percent of economic output this year, and says at that rate Saudi savings would run out after five years. Standard & Poor’s cut the country’s credit rating last week. But for now, as it looks to trim project spending and payments to contractors, the world’s top oil exporter is making sure most of its citizens don’t feel the pinch.
OPEC will probably hold production steady at its meeting next month as the gap between supply and demand for oil closes, according to the analyst who correctly predicted last year’s rout in prices.
Decades of financial discipline that honed Exxon Mobil Corp. into the leanest, most-efficient oil company in the world are paying off as it navigates the worst market slump since the 1980s.
While oil drillers cut spending to the bone, US refiners are reaping a windfall from low oil prices. Tesoro Corp. reported record profit in the third quarter, while Valero Energy Corp., Phillips 66 and Marathon Petroleum Corp. posted their best quarter in at least three years. Crude prices are down by more than half from their 2014 peak, while American drivers are on pace to set a record for miles driven.
Exxon Mobil Corp. posted higher-than- expected profit as soaring margins on processing oil into fuels blunted the impact of collapsing crude markets. Third-quarter net income fell to $4.24 billion, or $1.01 a share, from $8.07 billion, or $1.89, a year earlier, Irving, Texas-based Exxon said in a statement on Friday.
Husky Energy Inc. plans to keep cutting jobs after eliminating 1,400 positions, the most disclosed by a Canadian energy company in the oil-price slump. Job cuts have represented 80 percent contractors and 20 percent employees and will continue, Husky said in a statement Friday, reporting its biggest-ever quarterly loss. The Canadian producer and refiner controlled by Hong Kong billionaire Li Ka- Shing also outlined plans to pay its dividend in stock, consider asset sales and extend a companywide salary freeze started at the end of 2014. The shares fell 5.5 percent to C$19.16 at 9:36 a.m. in Toronto.
Iran may roil global oil markets with plans to sell about 45 million barrels of fuel stored in tankers in the Persian Gulf within three months of the removal of sanctions on its economy, according to analysts. Most of the stored oil is condensate that contains a sulfur compound, which complicates sales because many refineries can’t process it, said Victor Shum of IHS Inc. and Robin Mills at Dubai-based Manaar Energy Consulting. To market this large amount of oil within three months -- the equivalent of about half a million barrels a day -- Iran will have to resort to offering deep discounts, they said. “Iran’s getting ready to open the taps,” Shum, IHS’s head of oil market research, said by phone on Oct. 26. “If they want to unwind this supply in the current weak market, they’ll have to offer discounts. It’s a buyer’s market.”
Crude was poised to end the month below $50 a barrel for the fourth time amid a global glut that’s showing no signs of relief for oil and gas companies that posted more than $19 billion in writedowns in a single week. Futures slid as much as 1.3 percent in New York. Output from Iraq, the second-biggest OPEC producer, exceeds 4 million barrels a day, Oil Minister Adel Abdul Mahdi said, according to the Almada news website.
Big US oil companies are starting to think small. A stubborn 16-month crude rout with no end in sight is driving the largest US oil producers away from costly, high- risk megaprojects long touted as the industry’s future and toward safer shale operations that generate the cash needed to satisfy anxious investors. Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp., ConocoPhillips and Hess Corp. have all either delayed or abandoned projects that range from the deep seas of the Gulf of Mexico to Canada’s oil sands and the US Arctic. At the same time, Exxon and Chevron both announced plans to substantially increase US crude production, largely as a result of their shale operations.
China Petroleum & Chemical Corp.’s third-quarter profit plummeted 92 percent as lower oil prices and production dwarfed an increase in refining revenue. Net income at Asia’s biggest refiner, known as Sinopec, was 1.64 billion yuan ($258 million), or 0.013 yuan a share, compared with 19.3 billion yuan, or 0.165 yuan, a year earlier, the Beijing-based company said in a statement to the Shanghai Stock Exchange on Thursday. That compares with the 4.27 billion yuan average of three analyst estimates compiled by Bloomberg. Higher refining revenue was swamped by a drop in oil prices. Brent, the benchmark for more than half of the world’s crude, averaged about $51 a barrel in the third quarter, compared with more than $103 a year ago.
The marathon legal war over oil pollution in the jungle in Ecuador—now 22 years old—can outrage, but also exhaust, diligent observers. But here's a new twist.
Oil majors had big plans for Brazil, but you can’t tell by looking at the country’s offshore drilling these days.
More than a year into the worst oil bust in a generation, companies keep tallying the carnage. Most of the industry’s third-quarter results will be reported over the next two weeks. Here are three numbers to watch:
Oil is a better bet than Treasuries as the Federal Reserve contemplates raising interest rates, according to Park Sungjin, an investor in Seoul.
Royal Dutch Shell Plc made its second major strategic change in as many months, saying it will take a $2 billion charge as it shelves an oil-sands project in Alberta after walking away from an Arctic drilling program.
Kazakhstan’s government is considering levying a penalty on a venture led by BG Group Plc and Eni SpA that operates the nation’s second-biggest producing oil and gas field as the state seeks extra revenue to bolster its finances, according to two people familiar with the plan. The fine on the Karachaganak project could be as much as $2 billion, one of the people said. That would be roughly in line with penalties the government threatened to impose in a 2010 dispute that ended with the state taking a 10 percent stake in the project. The Central Asia nation is studying the possibility of imposing the fine because the companies haven’t fulfilled certain contractual obligations, the people said, asking not to be identified because the matter isn’t public. The penalty may be a precursor to the government increasing its stake in Karachaganak, they said.
Oil extended losses from the lowest close in two months before U.S. government data forecast to show crude stockpiles expanded in the world’s biggest consumer. Futures slid as much as 1.5 percent in New York, falling for a third day. Inventories probably rose by 3.1 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Algeria supports Venezuela’s call for a summit of heads of state from OPEC and other oil-exporting nations to lift prices, Algerian Foreign Minister Ramtane Lamamra said in Paris. Oil’s rally above $50 a barrel earlier this month failed as surging U.S. inventories bolstered speculation that a global glut will be prolonged. The Organization of Petroleum Exporting Countries continues to pump above its quota and the International Energy Agency sees world crude supplies remaining ample until at least the middle of 2016.
Singapore’s Pavilion Energy Pte has signed a 10-year LNG agreement with a unit of Russia’s gas giant Gazprom PJSC, Chief Executive Officer Seah Moon Ming said Tuesday. The liquefied natural gas unit of Singapore’s state-owned Temasek Holdings Pte has also signed a memorandum of understanding with the Chinese energy company Huadian to supply LNG from 2020 onward and a similar agreement with Japan’s Jera Co. to jointly procure and invest in LNG, he said at a conference in Singapore.
Daewoo Shipbuilding & Marine Engineering Co., the world’s second-largest shipbuilder, posted its second straight quarterly loss as a slump in oil prices increased costs for its offshore operations. The third-quarter loss was 1.35 trillion won ($1.2 billion), compared with a 35.5 billion-won profit a year earlier, the company said in a regulatory filing Tuesday. That’s wider than the average 95.2 billion-won loss of eight analyst estimates compiled by Bloomberg. In the second quarter, Daewoo Shipbuilding posted a loss of 2.3 trillion won, its biggest ever. Customers increasingly are asking global shipyards to delay delivery of ships and offshore rigs as weaker economic growth and sluggish oil prices make it difficult for them to pay for the projects.
