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Shell Targets Spending as Profit Plunges 83%
Royal Dutch Shell PLC said Wednesday that it would bring the hammer down harder on spending as it contends with a nearly two-year slump in oil prices that dragged the company’s first-quarter earnings down 83% compared with a year earlier. In its first results since completing a landmark acquisition of BG Group PLC earlier this year, the Anglo-Dutch oil giant said Wednesday that it plans to slash its capital spending by nearly 10% in 2016 and expects its operating costs to fall to $40 billion, down $13 billion compared with 2014 levels. “In very simple terms, we’re taking costs out of projects, and projects out of the funnel,” Shell’s chief financial officer Simon Henry told journalists Wednesday. The spending cuts come as Shell reported a sharp drop in quarterly profit on a current cost-of-supplies basis—a number similar to the net income that U.S. oil companies report—to $800 million, down […]
Energy and Climate Change Committee backs UK’s draft legislation on energy – Electric Power
The Energy and Climate Change Committee backed the UK government’s draft legislation on energy but urged the government and Ofgem to keep decision-making processes transparent. In a report published on Wednesday, the House of Commons select committee, ECCC, said the draft energy legislation has the potential to support the government in its goal of increasing market competition and cutting consumer costs. However, the ECCC said it “should be amended to ensure that Ofgem and government are transparent about the costs and benefits of the decisions that they make using their powers under the legislation, and that industry is able, where appropriate, to challenge them.” In January, the government said it plans to provide Ofgem with powers to support consumers in undertaking next-day switching between energy suppliers and to enable suppliers to use customers’ half-hourly consumption data in the electricity settlement process. “We agree with the proposals to give Ofgem […]
Alberta Forest Fire Halts Shell Oil-Sands Operation
Raging forest fires in Canada’s oil-rich province of Alberta forced the closure of one major oil-sands mining operation on Wednesday and reduced output at another, a day after tens of thousands of people evacuated a remote community that serves as a hub for the oil-sands industry. The rapid spread of the blaze emptied the town of Fort McMurray of some 80,000 residents and has started to affect operations at major oil-sands productions sites. The oil-sands facilities aren’t directly threatened by the uncontrolled forest fires, but have been affected by the mandatory evacuations of workers and their families. Many of the oil-sands sites opened their worker camps to evacuees and operators have sent nonessential staff out of the area. No injuries or casualties have been reported, but the fires swept through areas in and around Fort McMurray. Local authorities didn’t have an estimate for the number of homes or […]
Russian Ruble Falls Most in World on Oil After Two-Day Holiday
The ruble weakened the most among currencies worldwide, catching up with the biggest decline in oil in more than a month, as Russian markets reopened following a two-day holiday. The currency slid 2.6 percent to 66.28 per dollar by 11:40 a.m. in Moscow, the biggest fall in almost two weeks. That pared its gains in 2016 to 11 percent, the most in emerging markets after Brazil’s real. Brent crude tumbled as much as 6.6 percent on Monday and Tuesday when Russian markets were shut for May holidays. The price of Russia’s main export earner has slowed its rebound from a 13-year low in January as data fueled bets that a worldwide supply glut is entrenched. Hedge funds and other large speculators have trimmed net wagers on a stronger ruble by 47 percent since they reached a one-year high of 5,142 in March, according to the Commodity Futures Trading Commission […]
Venezuela 2016 Oil Production Expected to Fall Further
Venezuela’s oil output in the first quarter of the year has fallen more than investors had expected, with a production level expected to remain at a lower level for the rest of the year, a report by an energy consultancy company has revealed. According to Miami-based IPD, output fell 188,000 barrels a day in the first quarter, down to 2.59 million barrels a day, making this the first time since 2008 that oil output has fallen across every region in the country. The falling output is due to drilling delays, insufficient maintenance, theft and diluent shortfalls. “They have not kept up on maintenance and it is showing everywhere: oil production, electricity problems. The place is falling apart,” Ray Zucaro , RVX Asset Management’s chief investment officer said. The Guri dam, which produces about three-quarters of the country’s electricity, is dangerously close to shut-down status , which would exacerbate Venezuela’s […]
Biofuel Breakthrough: Production Jumps 64%
This week I wrote an update on the progress toward cellulosic ethanol commercialization, and given my previous coverage on the topic (especially Why I Don’t Ride a Unicorn to Work ) this seems like an appropriate subject to discuss here. Last week the U.S. Environmental Protection Agency (EPA) announced that during the first quarter of 2016, just over 1 million gallons of cellulosic ethanol were produced. In fact, production for the month of March jumped 64 percent from the previous month to 446,000 gallons produced, the highest levels of the modern era. Production this year is well ahead of the pace in 2015, when 2.2 million gallons of cellulosic ethanol were produced for the entire year. So, have we finally […]
