Oil major ConocoPhillips has cut its capital budget for 2015 by 20%, the company said. The reduction, to a CAPEX of $13.5billion, has been influenced by relatively lower spending on major projects as well as the deferral of spending on US shale. Ryan Lance, chief executive, said: "We are setting our 2015 capital budget at a level that we believe is prudent given the current environment.
Fears over Chinese demand combined with another decline in oil prices to trigger a poor start to the week for European markets. A slump in export growth in the world’s second largest economy spooked investors, particularly as imports also contracted rather than expanded.
Enegi Oil has agreed to end a farm-in agreement with BSE (Black Spruce Exploration) in Canada. The company said it the decision had been taken in recognition of the “problems” in completing investment for large-scale plans in the current climate. It said the termination of the agreement would also allow for faster results and appropriate regional development in plays such as western Newfoundland.
Oil and gas services firm Can Group has recorded a boost in turnover and pre-tax profits for the year ending December 2013. The Aberdeen-headquartered firm, which provides engineering, inspection and trade services to the oil and gas sector, posted a 20% increase in pre-tax profits to £18.5million, from £15.4million previously.
Global oil and gas exploration projects worth more than £95billion are likely to be put on hold next year as plunging oil prices render them uneconomic, new figures show. The shelving of developments around the world could put a severe constraint on supplies by the end of the decade, it is feared. As big oil fields that were discovered decades ago begin to deplete oil companies are trying to access more complex and hard-to-reach fields, which in some cases are deep under sea level.
For over 20 years I have analysed oil price fluctuations. Why? Well, every country’s economic prospects and people’s jobs, yours and mine, are affected in one way or another by what happens to oil prices. Life and death decisions, including continuing national sovereignty for some nations, hinge on the price of oil. The current dramatic and fast 35% fall in oil price could be a pivotal moment in historical events. For example, will the oil revenue dependent Russian economy survive if oil prices stay at around $70 a barrel? If not, what action will Russia take?
Oil & Gas UK chief executive Malcolm Webb sat down with the Chief Secretary to the Treasury, Danny Alexander in an exclusive interview for Energy Voice. The minister sets out the plans by the government including the introduction of new tax breaks to trigger a fresh wave of North Sea exploration.
As a result of lower prices and rising cost the oil and gas industry has been lobbying hard for improvements to the oil and gas fiscal regime and will have been watching the Autumn Statement closely for positive reforms. Whilst some announcements were made, further consultation will take place before the package is agreed. It is not clear whether this will happen ahead of next year’s general election. Further details were announced by the Rt Hon Danny Alexander MP in Aberdeen on Thursday.
Offshore industry chiefs have urged the UK Government to speed up measures to support the sector after coalition ministers unveiled radical plans to reward North Sea investment. Tax regime changes aimed at making sure as much oil and gas as possible is extracted have been welcomed by operators. But they want them implemented sooner rather than later because of the challenges posed by low crude prices and high exploration costs. Highland MP and Chief Secretary to the Treasury Danny Alexander, and Exchequer Secretary to the Treasury Priti Patel, were both in Aberdeen yesterday to present their department’s financial review of the sector.
The UK Government has unveiled a radical plan aimed at rewarding investment in the North Sea in a bid to see as much oil and gas extracted as possible. A review of the fiscal regime for the oil and gas sector was announced in this year’s Budget, with a new Treasury report saying “significant change” was needed in order to continue to attract investment. Chief Secretary to the Treasury Danny Alexander launched the new report as he met key industry figures during a visit to Aberdeen. There is still “significant hydrocarbon reserve” in the UK Continental Shelf (UKCS), the Government said, which could “generate significant benefits for the UK” if it can be recovered.
The head of oil and gas for professional services firm EY said the government has taken a "crucial step" towards protecting the longevity of the UK's oil and gas industry. Derek Leith said the recommendations were also in line with what had been set out in the Wood Review. The Chief Secretary to the Treasury, Danny Alexander, was in Aberdeen to outline three principles which will underline the future of oil and gas fiscal policy, as well as a new set of proposals. Mr Leith's comments come after he spoke to Energy Voice yesterday to give his initial reaction to the Chancellor's Autumn Statement.
Chancellor George Osborne has promised the first North Sea tax cuts in two decades – and said they would protect tens of thousands of jobs in the “vital” offshore sector. He used his Autumn Statement to outline eagerly anticipated measures to boost the industry, with Chief Treasury Secretary Danny Alexander due to unveil the full package in Aberdeen today.
Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on November 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47% from this year’s peak in June, and 29% less than the $70.15 paid for Brent, the global benchmark.
Offshore firms will be offered new tax breaks today to trigger a fresh wave of North Sea exploration, it can be revealed. Energy Voice has learned that Chief Treasury Secretary Danny Alexander will reveal plans to try to end the UK's exploration crisis through a system of tax credits for seismic surveys. The move is expected to be welcomed by industry leaders who have repeatedly called for extra incentives to stimulate flagging exploration rates.
Chancellor George Osborne took the floor yesterday for what is the last Autumn Statement before the next general election, and probably the current Government’s final opportunity to impact the economy. But given the fiscal position the Government finds itself in with the budget deficit remaining high and with tax revenues lower than expected, was the Chancellor able to deliver any December cheer for the oil & gas industry? Well, we definitely saw a number of positive items. The Government restated its support for both the onshore and offshore oil & gas industries, with a mixture of tax and other incentives such as the allocation of £31m to fund the creation of a world class sub-surface research test centre through the National Environmental Research Council.
We watched yesterday's Autumn Statement from the Chancellor George Osborne, with feelings of hope and trepidation. We understand the economic constraints under which today’s Autumn Statement is delivered and there’s consensus in our offices this afternoon that the immediate reduction of two percentage points in its tax rate is an important first step towards improving the fiscal competitiveness of the UK North Sea – but, without question, more needs to be done.
The FTSE 100 Index finished 25.5 points lower at 6716.6 as continued volatility in oil prices - with Brent crude trading at just below 71 US dollars a barrel - pegged back the performance of commodity stocks. Royal Dutch Shell was in focus after spiking yesterday on the back of speculation linking it to a merger with BP. Shares fell back 33p to 2259p but BP rose another 3p to 436.85p.
Wave energy company Aquamarine Power has announced plans to “significantly” downsize its business. It means an undisclosed number of jobs will be lost. According to CEO, John Malcolm, “this will involve retaining a core operational and management team to run the business and continue maintaining our Oyster 800 wave machine at the European Marine Energy Centre in Orkney”.
Official figures show that North Sea tax receipts are predicted to fall by 40% over the course of this year. The Office for Budget Responsibility (OBR) said revenues to the Treasury would drop to £2.8billion by the end of 2014/15, which is 0.9% lower than was forecast at the Budget in May. The independent body also said that tax to the Exchequer from the North Sea would be £1.6 billion lower in 2015-16 than was predicted in March, with “smaller reductions” due in later years.
Oh well, the North Sea is being kept on tenterhooks for a few more hours, with Treasury first secretary Danny Alexander scheduled to deliver the supposed main news today tomorrow. All chancellor Osborne was prepared to do was trail a few crumbs without even mentioning the North Sea fiscal review, let alone whether it will be the cornerstone of the Alexander delivery, though it of course will be. Just three measures were mentioned in his Autumn Statement address: “I can tell the house today that we will go ahead with an immediate reduction in the rate of the supplementary charge from 32% to 30%, we will expand the ring-fenced expenditure supplement from six to 10 years and we’re introducing with immediate effect a new cluster area allowance.”
Chancellor George Osborne has confirmed that he will cut North Sea oil and gas taxes. He pledged to reduce the supplementary charge from 32% to 30%, expand the ring-fenced expenditure supplement from six to 10 years, and introduce a new cluster area allowance. The UK Government insisted that the changes would trigger billions of pounds of investment in the North Sea and create thousands of new jobs. The cut in the supplementary charge represents a partial climb-down by the chancellor, who infamously almost wiped out investment at a stroke when he hiked it from 20% to 32% without consultation in 2011.
The FTSE 100 bounced back yesterday as stronger commodity stocks helped it more than recover the ground lost in a 1% decline over the previous session. The rebound came as the price of Brent crude rose to $71 a barrel, having slumped to a five-year low close to $67 on Monday after Opec ministers failed to cut production.
Offshore leaders are poised to find out if UK ministers will move to resuscitate the North Sea sector – or stand by as price falls hammer a "nail in the coffin". Chancellor George Osborne is under pressure from oil and gas chiefs to provide major new tax breaks for the industry when he delivers his Autumn Statement to MPs today. The Treasury is due to publish its review of the North Sea tax regime, which was launched at the Budget in March, against a backdrop of plummeting world prices and soaring costs which experts fear could put projects and jobs at risk.
The falling oil price has caught-out investors in a retail bond linked to a leading North Sea producer. EnQuest issued the bond two years ago, offering an attractive 5.5% interest rate until 2022. The company used it to raise £155million to help develop the Kraken field off the Shetland Islands.
BG Group has revised the salary package for its new chief executive Helge Lund following a backlash from shareholders. Mr Lund, who has been likened to Real Madrid and Portuguese footballer Cristiano Ronaldo because of his superstar status in the global oil and gas industry, was set to get a £12million “golden hello” in shares and the chance to earn £13.5million a year if he hits performance targets. Mr Lund’s share award has been cut from £10million to £4.7million.