The 1984 version of the famous Shell Make Money campaign has set alight the battle among the petroleum companies, and could lead to a renewal of the sort of promotional campaigns that were so familiar in the late 1960s.
News and information on Royal Dutch Shell Plc.
earclosetotheground: London Lad: we agree that buying BP now is writing an open check. Until its legal liabilities are established (and possibly confirmed by a higher court), a buyer has no idea how to assess the future cash commitments related to Gulf spill. The difference with the BG situation is that a more creative Shell Board would have considered what BG did itself later on: namely floating off the downstream gas business and its retail charging and collection business. In other words, it was arisk that could be managed> Macondo is not (at this point). As a result, Shell lost a great opportunity.
Outsider: Relieved: My point entirely. If unconventional (ie Bakken/Eagle Ford....) wells need to be worked over after 1-2 years of production (at a cost similar to the drilling of a new well) we will see a rebalancing of supply and demand within a couple of years - it will not be economical to maintain production and the wells will be shut in or abandoned. Wells that have already been drilled are "sunk costs" and will be produced for as long as possible, as is always the case. The difference with unconventionals is that "as long as possible" means 1-2 years rather than 10-20 years as was the case with conventionals.
Relieved: Outsider: North Dakota just celebrated the production of 1 billion barrels of oil from the Bakken shale. Two thirds of that production came in the last 3 years. These wells pay off very quickly at $100 a barrel but production declines very rapidly as well. The same holds true for the Eagle Ford shale in Texas. With drilling stalled in these two areas production will decline quickly,as will the 'new' shale oil supply of US produced oil. This could take a couple of million barrels out of US and world daily production. Oil prices won't rebound overnight, but they will rebound and go higher unless other sources of energy expand or new technologies for energy production mature and expand. Without new drilling and new supplies coming online oil production world wide will decline. Low prices expand demand. Eventually, there is a collision between supply and demand, and it won't take long to occur. We have seen it before.
Outsider: Relieved: I agree that the price of oil in cyclical, but the production decline of unconventional wells is much faster than the decline of conventional wells. I would expect a year or two before there is a marked decline in unconventional production sufficient to balance overall supply and demand.
Relieved: Oil prices have relatively long term (relative to other commodities) price swings. In general the highs (or lows) come and go about every seven years (roughly). This swing time is related to the lag time necessary to bring on new production, and for current productions levels to decline enough to stimulate higher prices and increased drilling and production. Exxon is probably generally correct in their assessment of where oil prices are headed over the long term. As production now declines because of low prices for crude, it won't be long before prices start an upswing. Whether BP can last another couple of years at current or lower prices for crude is another matter.
Rangefinder: The most obvious rival source for large-scale hydrogen is nuclear power generation not unreliable wind and solar. This was proposed in a paper presented at a nuclear forum some 20 years ago on the hydrogen economy. Hydrogen from nuclear = no/low CO2 emissions- unlike natural gas or other fossils
Relieved: Given the recent US Supreme Court ruling against BP in its efforts to limit damage claims it would appear that their balance sheet just took another hit. How much of a hit is a matter of speculation at this point in time, but it won't be chicken feed.
Outsider: Total and BP have worked together on JVs for many years, and Total (especially under Desmarais) have a successful track record at mergers. Add to that Total's new found enthusiasm for London (perhaps a UK tax domicile?) and it's just a question of how much the liabilities scare them. Not much obvious overlap/conflicts in either Upstream or Downstream either.
LondonLad: Have to agree with “earclosetotheground” that this rumour is almost certainly a result of the “city” boys making money to pay off their mortgage (again). Why should Shell take on the toxic element of the Gulf spill? No chance. I was involved with the possible bid for BG back in the 90’s and the final put down on this was the problems BG was then having with domestic supply aggro in the UK.
Relieved: With regard to the defamation suit now working its way through the US court system - I know of another case Shell is likely to face, regardless of how this case works itself out. And this one could make the news. Shell's hubris is amazing, and it is time people started taking it to task.