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Oil sands companies losing up to $50 million a day as fires rage: analysts
A wildfire burns near Highway 63 south of Fort McMurray, Alberta, Canada, May 8, 2016. Out-of-control wildfires that have consumed over a million acres of land in Canada’s Alberta are costing oil companies as much as $50 million a day in lost production, according to analysts. Alberta’s oil producers curtailed production by May 5 as fires prompted the evacuation of Fort McMurray, a central production hub. By May 9, more than 1 million barrels of daily oil output had been halted. “We estimate total daily pre-tax profit loss at $45 to $50 million,” Barclays analyst Paul Cheng said in an email to Reuters. For many companies, the shut-ins will translate directly to lower revenue in the second quarter, said Chris Feltin, an analyst at Macquarie Capital in Calgary. “The big thing here is that business interruption insurance is unlikely to be claimed because the damage isn’t direct to their […]
Suncor Poised to Get Back to Work as Fire Evacuations Eased
Cooler, humid weather that’s helping control a wildfire in the heart of Canada’s oil patch is allowing Suncor Energy Inc. and Syncrude Canada Ltd. to start getting back to work. Municipal authorities, citing improved conditions late on Friday, lifted mandatory evacuation orders for seven oil-sands worker accommodation camps and production facilities in Alberta, including Suncor’s base plant mine and Syncrude’s Mildred Lake mine. That’s much sooner than they’d predicted just hours earlier, under the expectation that air quality would need to improve and a few more days of firefighting would be necessary to make those sites safe. More than 1 million barrels a day of output was taken off line by a wildfire that’s ravaged the region since the start of May. More than 80,000 people fled the inferno from Fort McMurray and surrounding communities initially, and another 8,000 workers were forced to clear out earlier in the week […]
BP’s oil search strategy shrinks with budget cuts
The surprise departure of BP’s exploration boss has turned the spotlight on an oil search strategy that, after years of spending cuts, is focusing mainly on expanding existing fields rather than venturing expensively into the unknown. That caution reflects a firm chastened by the $55 billion cost of its 2010 Gulf of Mexico spill, and needing to squeeze every last drop out of a sharply reduced exploration budget at a time of low oil prices. “Exploration doesn’t necessarily have to look like (nature broadcaster) David Attenborough standing on a brand new frontier,” a BP source told Reuters. While BP’s total reserves and fields coming onstream in the next four years look healthy compared to the other majors, its long-term project pipeline is the slimmest among its peers and its break-even costs are the highest, […]
Why The Arctic Oil Dream Is Not Over Yet
The race to discover oil and gas in virgin Arctic waters is now on, as Norway offered oil majors a lifeline on Wednesday by opening up what experts say could be home to 15 percent of the world’s undiscovered oil and 33 percent of the world’s undiscovered natural gas. Norway officials on Wednesday awarded 10 new oil and gas licenses to explore the untapped area of the Arctic Barents Sea, an area that until 2011, was disputed for almost 40 years with Russia. The drilling licenses consist of 40 blocks that were awarded to 13 oil companies. Of the licenses granted, 13 companies were offered participating interests, and five were offered operating licenses. Related: The Newest Metric For Gauging Stock Performance In The Oil Patch Norway has not offered exploration licenses for new acreage in over twenty years, and this new acreage is particularly appealing to […]
Ruble Set for Longest Losses Since February as Citi Sees Risks
The ruble declined for a fourth day, poised for the longest losing streak since February, as oil retreated and Citigroup Inc. cautioned the Russian currency could depreciate further against a rising dollar. The ruble dropped 0.2 percent to 66.96 per dollar by 11:28 a.m. in Moscow, after losing 2 percent last week. Brent crude, the oil benchmark for pricing the country’s main export blend, declined 0.8 percent to $48.32 a barrel in London. Russian stocks declined, while government bonds were little changed. The world’s best currency rally in the past three months is growing vulnerable to higher U.S. interest rates that Federal Reserve officials signaled could come as early June, according to Citigroup strategists. While driving the greenback higher, rate hikes would also sap appetite for riskier assets and diminish the appeal of a carry trade that helped investors make up gains lost to zero rates. “I think the […]
