News and information on Royal Dutch Shell Plc.
By Ron Bousso and Terry Wade
LONDON/HOUSTON, Feb 7 As oil and gas companies cut ever-deeper into the bone to weather their worst downturn in decades, boards have adopted contrasting strategies to lead them out of the crisis.
Crude prices have tumbled around 70 percent over the past 18 months to around $35 a barrel, leading to five of the world’s top oil companies reporting sharp declines in profits in recent days.
Executives at energy firms face a tough balancing act: they must cut spending to stay financially afloat while preserving the production infrastructure and capacity that will allow them to compete and grow when the market recovers.
By Ed Crooks: February 5, 2016
Earnings reports from the largest listed oil companies have this week given a series of seismograph readings on the upheaval in the crude market. The implications for investors, employees and suppliers are grim. Worse, those earnings were all recorded in a period when oil and gas prices were significantly higher than they are now.
In a run of generally grim reports, BP’s was perhaps the worst: in 2015 it made a $5.2bn loss, the largest in its history. ConocoPhillips of the US, which after spinning off its refining business in 2012 became the world’s largest pure exploration and production company, was another standout, cutting its dividend by 66 per cent just two months after promising that the payout would be its “highest priority”.
Over the past several weeks, the world’s biggest oil companies have posted earnings that show just how brutal it is these days to be an oil major. The industry is going through the biggest downturn since the 1990’s.
Following a dramatic 60% plunge in oil prices over the past 18 months, oil companies are desperately slashing costs by cutting jobs, decommissioning rigs, halting the purchase of new oil gear, and pulling back from exploring new fields.
On Tuesday morning, BP BP -8.45% reported its worst annual loss in over 20 years. The company, which is the sixth largest in the world, says it will cut 7,000 jobs by 2017, or almost 9% of its workers.
Commodities | Mon Feb 1, 2016 9:28pm GMT
Credit ratings agency Standard and Poors on Monday downgraded oil major Royal Dutch Shell Plc to A+/A-1 from AA-/A-1+ and put its long-term credit rating on creditwatch negative citing sliding oil prices.
S&P said Shell’s one-notch downgrade, driven by weaker forecasts for its credit metrics over 2016-2018 and slower profit improvements, excluded the ratings impact of its BG Group Plc acquisition.
Shell had said it was prepared for a downgrade as a result of the BG deal.
Standard & Poor’s lowered its rating on Royal Dutch Shell Plc and sees a significant likelihood of downgrades for several Europe-based integrated oil and gas majors in the next weeks.
“We lowered our ratings on Royal Dutch Shell Plc to ’A+/A-1’ from ’AA-/A-1+’ and placed the long-term rating on CreditWatch with negative implications,” S&P said in an e-mailed statement. “We also placed on CreditWatch negative our ratings on BP Plc, Eni SpA, Repsol S.A., Statoil ASA, Statoil Forsikring AS, Statoil US Holdings Inc., and Total S.A.”
CHLOE FARAND: 31 JAN 2016
Lloyds, brewer SABMiller and drugs company AstraZeneca were also among the six multinationals not to have paid any corporation tax in 2014, reports the Sunday Times.
The same year, the six British companies made a combined global profit of £30bn.
Shell used a complex corporate structure, a company branch in Switzerland, with hardly any tax rates, and tax havens such as Bermuda to reduced its tax payments.
In 2014, it paid no UK corporation tax but made a global profit of £19.87bn writes the Sunday paper.
By JON REES FOR THE MAIL ON SUNDAY: 31 January 2016
Britain’s biggest oil groups will this week report a near £10billion slump in profits as the calamitous effect of the low oil price takes its toll on the blue chip giants.
Both BP and Shell are expected to see their full-year profits for 2015 slashed by about 40 per cent leading to fears that they will struggle to maintain their dividend payouts to shareholders.
BP is predicted to report profit for the year of $6.8billion (£4.8billion) down from $12.1billion previously, while Shell is set to report profit down to $10.7billion (£7.5billion) from $19billion.
By Prabhat Sakya – Monday, 25 January, 2016
Isn’t it interesting how, whenever there’s any news, we tend to jump on the negative side rather than the positive? As a commuter, I drive many thousands of miles every year. That’s why it’s great for me that the oil price is falling. And alongside the hundreds of pounds I’m saving on my daily commute, I’ll save a pretty penny on my heating bills over the next few years. Cheap fuel allows the global economy to run more cheaply, and that benefits consumers around the world.
MARTIN FLANAGAN: Monday 25 January 2016
Major investors are expected to back Shell’s troubled £36 billion takeover of rival BG Group this week despite reservations that the plunging oil price has made the deal less attractive than when first unveiled last year.
David Cumming, head of equities at Edinburgh-based Standard Life Investments, has been one of the most high-profile opponents of the merger, calling it “value destructive for Shell shareholders”.
Some other institutional investors also have concerns about the terms of the deal in the current depressed climate for the oil industry, and it is thought the Shell shareholder vote on Wednesday and BG vote on Thursday could be close.
Refining profits that buttressed earnings for Exxon Mobil Corp. and Royal Dutch Shell Plc as crude prices plunged are now slumping, further pressuring all of the world’s biggest oil companies as they move into 2016.
Global refining margins, the estimated profit from turning oil into gasoline and diesel, fell 34 percent in the fourth quarter, the steepest decline in eight years, to $13.20 a barrel, data on BP Plc’s website show. Every $1 drop cuts BP’s pretax adjusted earnings by $500 million a year, according to its website.
Shell will on Wednesday become the first major oil producer to announce annual earnings as it enters the final stages of its plan to buy BG Group Plc in the industry’s biggest deal in years. Investors will scrutinize those preliminary numbers for signs Europe’s largest oil company is doing enough to justify the acquisition as crude drops below $30 a barrel.
Shell has cut thousands of jobs and reduced spending as Chief Executive Officer Ben Van Beurden prepares the company for a prolonged downturn while looking to BG to add production and cash flow. The 18-month slump in crude, the longest since the mid-1980s, has delayed $380 billion of investments in the industry, driven down profits and erased more than $2.7 trillion of oil companies’ market value.
Sunday 17 JAN 2016
German carmaker Volkswagen was one of the “most disliked” companies for pressure groups last year following its emissions scandal, a survey has found.
Shell was the most criticised by campaigners, followed by Monsanto, which makes genetically modified food.
Half of the top-10 most criticised companies on Sigwatch’s list were energy firms, because of “the elephant in the room – climate change,” Mr Blood said.
Top was Shell, but TransCanada, ExxonMobil, EDF and BP also featured.
By Royston Wild – Friday, 15 January 2016
Another day, another chance for further harrowing weakness across stock markets and commodity classes. And so it has come to pass.
Brent values fell even further below the $30 per barrel marker during Friday trade, marking fresh nadirs not seen since 2004. The benchmark has dropped more than 10% since the start of the week, and levels of $60 per barrel seen just six months ago seem a very, very long way away.
While fossil fuel plays (LSE: BP) and Shell (LSE: RDSB) have suffered fresh weakness as a result — the operators’ share prices are down 5% and 12% respectively since 2016 kicked off — I believe investors should resist attempting to pick up a bargain.
Extracts from an article by Lior Cohen: JAN 14, 2016
Following this fall, the dividend yield is currently at 9.4% – a historic level.
Some investors think that because the company paid and raised its dividend since WW2, it means it won’t deviate at this stage. But let’s not forget that times are changing. And if Shell were to face say a Gulf of Mexico oil spill as BP (NYSE:BP) encountered back in 2010, you can bet the dividend will be eliminated in a heartbeat – especially in times of low oil prices. But even without a major oil spill, the current oil price environment stresses Shell’s cash reserves.
By STANLEY REED: A version of this article appears in print on January 13, 2016, on page B3 of the New York edition
LONDON — The persistent plunge in oil prices has translated into a new round of industry job cuts.
The British oil giant BP said on Tuesday it would eliminate 4,000 of the approximately 24,000 positions in its exploration and production units this year. That would be in addition to about 4,000 jobs that the company cut last year, when it trimmed its work force to about 80,000.
Shell has had a bad start to 2016 and is trading close to its 52-week low, but investors should not consider this as an opportunity despite a strong balance sheet.
Shell’s strong balance sheet is overshadowed by the fact that its gross margin has declined and leverage has increased as compared to big oil players such as Exxon and Chevron.
Shell’s leverage growth of 32% is almost four times higher than BP’s leverage growth, indicating that its interest burden has increased at a faster pace than rivals.
By CLIFFORD KRAUSS: A version of this article appears in print on January 7, 2016, on page B2 of the New York edition
The decline in the global Brent oil benchmark price to below $35 a barrel, the lowest level since the depths of the 2008-9 economic downturn and a decline of nearly two-thirds since summer 2014, helped push stock markets lower.
The Standard & Poor’s 500-stock index, the main benchmark for the United States stock market, declined 1.3 percent Wednesday and breached the psychologically important 2,000 level to close at 1,990.26.
Saturday 2 Jan 2016
The giant oil spill from a BP rig off the US coast in 2010 nearly ruined the company, its chief executive has said.
Bob Dudley described the fire on the Deepwater Horizon and its aftermath as “a near death experience” for the firm.
It was one of the worst environmental disasters in the US and saw BP pay fines and compensation and sell off more than £30bn ($45bn) in assets.
Mr Dudley told ex-BP boss Lord Browne – a guest editor on BBC Radio 4’s Today programme – it was a “tragic accident”.
Trefis Team Contributor: DEC 30, 2015
Oil & Gas companies across the globe are choosing to curtail capital expenditures even though it might mean the loss of growth in future production. Royal Dutch Shell Plc. is also adopting this strategy and recently announced that it is revising its capital spending estimates for 2016. This announcement is the latest in a spate of cost cutting decisions the company has taken in the wake of the extended period of low crude oil prices. We believe that this is the right way forward for Royal Dutch Shell in the near term, and these measures will be beneficial in maintaining the company’s cash profit margins till oil prices begin to recover in the long run.
By Rupert Hargreaves – Tuesday, 29 December, 2015
The two oil giants have many advantages over their smaller peers, such as strong balance sheets, integrated operations and some of the lowest production costs in the business. Indeed, it doesn’t make sense to buy into the smaller producers such as Tullow Oil, Premier or Enquest when shares in Shell and BP are both on offer.
By Alan Oscroft – Thursday, 24 December, 2015
When the oil price slumped, the saving grace for BP and Royal Dutch Shell (LSE: RDSB) was dividends – both had the ability to keep paying dividends from other sources should earnings fall for a few years.
Royal Dutch Shell shares have fallen by 42% since their recent peak in May 2014, but that’s been offset to some extent by a 5.7% dividend yield last year and there’s a massive 7.7% expected for 2015. It’s still not a great overall performance, but compared to the way some smaller non-dividend oil stocks have fared, it’s almost heavenly.
The documents rap out a series of reasons why the current bombed-out oil price is not relevant to the logic of integrating these two vast companies. The deal will bring so many efficiencies, Shell promises, that its hallowed dividend will be safer, bringing in more cashflow to pay into the divi pot at as low as $50 a barrel. Few people really think crude is likely to stay below that for decades to come. And, as far as the value of the combined assets goes, it can breakeven at the low $60s, Shell adds.
Royal Dutch Shell’s takeover of BG Group may look less attractive after the slide in oil prices but the fact the same investors own nearly half of both firms means the deal is still likely to go through.
Investors holding about 43 percent of Shell’s shares also hold 53 percent of BG, according to Reuters data. For example, Blackrock, Franklin Mutual Advisers and Norges together hold more than 12 percent of Shell and nearly 7.5 percent of BG.
By SARAH KENT: Dec 8, 2015
Shell has slashed $11 billion from its capital spending and operating costs this year. The company said in July that it would cut 6,500 jobs and in October abandoned a major oil-sands project in Western Canada.
The company posted a loss of $6.1 billion in the third quarter, after taking a $2 billion charge for scrapping the project and recording impairment charges of nearly $4 billion as a result of the weaker oil and gas price outlook.
They may have to cut deeper if oil prices stay at or below $40 a barrel…
Royal Dutch Shell Plc, BP Plc and Statoil ASA no longer face an European Union investigation into potential manipulation of fuel benchmarks, the regulator indicated on Monday. Photographer: Andrey Rudakov/Bloomberg
Days after dropping a high-profile probe into some of Wall Street’s top banks, the European Commission quietly sounded the retreat from an antitrust case that’s embroiled some of the world’s biggest oil producers since 2013.
Reuters – Mon, 7 Dec 2015 17:58 GMT
By Philip Blenkinsop and Foo Yun Chee
BRUSSELS, Dec 7 (Reuters) – EU antitrust regulators have dropped Shell, BP, and Statoil from an investigation into suspected rigging of ethanol benchmarks, focusing instead on three producers of the biofuel.
The European Commission said on Monday it had opened a formal antitrust investigation into the actions of Spanish company Abengoa SA, Belgium’s Alcogroup SA and Lantmännen ek för of Sweden.
In April, EU antitrust regulators raided several bioenthanol companies and at the same time stepped up a two-year investigation into biofuel price benchmarks. In 2013, it searched the offices of BP, Shell and Statoil too.
By Aoife White: December 7, 2015
The European Commission “is currently not investigating further behaviors in price benchmarks for the crude oil sector,” Ricardo Cardoso, a spokesman for regulator said in an e-mail. He said the EU’s current probe focuses “on price benchmarks for the ethanol sector.”
Raids on Shell, BP, Statoil and price publisher Platts in May 2013 over suspected benchmark-rigging echoed probes into banks for trying to fix the London Interbank Offered Rate and foreign exchange markets. EU antitrust regulators levied 1.7 billion euros ($1.8 billion) in fines later that year over Libor manipulation.
The oil major Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) is closing in on its biggest ever merger with the UK based oil and gas producer BG Group (OTCQX:BRGYY). On Wednesday, the Anglo-Dutch oil producer revealed that it has received a green signal from Australia’s Foreign Investment Review Board following an approval from the country’s anti-trust regulator received last month. The BG Group is one of the major players in Australia’s rising LNG sector where the company has invested more than $20 billion on developing the Queensland Curtis LNG plant.
PUBLISHED: 21:50, 4 December 2015
Oil majors sprang a leak but airlines flew higher after Middle East oil cartel Opec failed to slash production.
Shares in BP fell 8.85p to 359.7p and Royal Dutch Shell surrendered 29.5p to 1599.5p as the oil-producing club opted to keep pumping near-record volumes of crude.
The price of a barrel of Brent crude was 0.8 per cent down at $43.49 and the cost of US light crude dropped nearly 2 per cent to around $40 amid fears of a continued supply glut.
By Micheal Kaufman on Dec 2, 2015
Environmentalists are winning the race against energy companies, as the world tries to adopt environmental-friendlier ways of energy generation. World leaders from over 19 countries and prominent personalities such as Bill Gates and Mark Zuckerberg are at the UN Climate Summit in Paris, which has been ongoing from November 30 and will continue until December 11.
The growing concern over global warming and rising temperatures has lined up global energy companies such as Royal Dutch Shell, BP plc. (ADR) (NYSE:BP) and Total SA (ADR) (NYSE:TOT). These companies have recently teamed up to support climate change and asked authorities to consider a carbon tax.
By HELEN THOMAS: Nov. 29, 2015 2:00 p.m. ET
Royal Dutch Shell can’t forcibly renegotiate the deal it struck in April to buy oil and gas producer BG: The U.K. Takeover Panel wouldn’t allow it. And amid griping over the price, the oil major argues the $58 billion cash-and-shares transaction should help its cash flow regardless. That may be so. It doesn’t, however, lessen the need for Shell to do more in cutting costs and spending.
The above EU Directive (available in many languages, including Dutch) may be of assistance to people around the world who are concerned about the operations of European oil companies.
A link to the directive is provided at the foot of this article.
The EU directive requires European companies involved in the oil industry to comply with the contents of the directive itself, and their own internal policies and standards globally (SEMS). Oil companies do not publish their own internal policies and standards, which they consider to be confidential. However, most court cases are actually the result of Shell’s employees ignoring the SEMS standards, so this is most helpful if copies of the relevant standards can be obtained through discovery or other means. The SEMS standards are required to be in place for the companies to operate in Europe.
By Royston Wild – Thursday, 26 November, 2015
To say that 2015 has represented another ‘annus horribilis’ for the oil industry would be something of a colossal understatement. Of course the year has yet to run its course, and the fossil fuel sector will be pinning their hopes on a ‘Santa Rally’ to put down a marker for 2016.
I am far from optimistic over the likelihood of such a scenario, however, and believe that industry giants like (LSE: BP) and Shell (LSE: RDSB) — firms that have seen their share prices dip 6% and 25% correspondingly since the turn of the year — have much more ground to concede.
A £22,500 fine imposed on the energy giant Shell as punishment for the worst North Sea oil spill in a decade has been dismissed as “paltry” by environmental campaigners.
The World Wildlife Fund (WWF) warned the size of the fine, for a company that earns billions, would “do little to deter future poor behaviour” by oil and gas companies to avoid more damage to the environment.
The leak from the Gannet Alpha platform in August 2011 was the worst in the region in 10 years and saw more than 200 tons of oil – about 1,300 barrels – flood into the sea.
Posted on November 18, 2015 | By Collin Eaton
HOUSTON — Probing one of its recent discoveries in deep waters of the Gulf of Mexico, Royal Dutch Shell found 100 million barrels of oil equivalent buried at its Kaikias field, nearby three of its massive production facilities and a network of subsea pipes, the company said Wednesday.
The one-year-old Kaikias discovery, about 60 miles south of the Louisiana coast in the Mars-Ursa basin, is nowhere near the size of the big-ticket deep-water oil fields that Shell uncovered in that region two decades ago.
Posted on November 10, 2015 | By Jordan Blum
A carbon tax or cap-and-trade system in the U.S. — and globally — would serve the energy industry better than the current slate of piecemeal state and federal regulations, Shell Oil Co. President Marvin Odum said Tuesday.
He acknowledged that Congress won’t take action soon in gridlocked Washington, but said that people should move beyond sound bites. Odum spoke at University of Houston’s energy symposium focusing on whether now is the right time for a carbon tax.
Robin Pagnamenta Energy Editor: November 7, 2015
The latest quarterly results season is receding into the accounting archives, with BP, Royal Dutch Shell, Chevron and the keenly anticipated numbers of Exxon Mobil now with us.
That lower oil prices continue to dent profits at the world’s biggest oil companies is no longer news. Figures on their often unloved downstream operations performing well bring a few smiles and keep detractors of the integrated model quieter than usual.
Take big beast Exxon, which reported quarterly profits of $4.24bn, down 47% on an annualized basis from the same quarter last year. Its profits from refining doubled to about $2bn, but upstream takings fell 79% to $1.4bn. Prior to Exxon, smaller rivals (e.g. – BP, Shell and Chevron) had all posted declines in headline quarterly profits earlier in the week. Yet read between the lines of the profit declines, and a common message on how to cope seems to be emerging.
Perhaps worth noting is that investment decisions on the scale of the recent Shell write-offs would have required approval by the entire EC in the Hague long before BvB was around. Few of the EC members who made those decisions are still present.
It seems strange that so many of the huge projects which have been abandoned are in North America, and serious questions need to be asked about why approval was given by the EC for these huge projects. Only one member of the EC is directly involved in North American activities, Marvin Odum.
The company, saying it expects prices to stay low for years, indicated that it would continue to cut costs and limit its investments in searching for and developing new oil and gas fields.
“We are now in action to rebalance our financial framework in this new price environment,” BP’s chief executive, Robert W. Dudley, said in a statement.
The company said its profit in the quarter was $46 million, compared with $1.3 billion a year earlier. Profit on the basis of underlying replacement cost, a more widely used figure, fell to $1.8 billion for the quarter from $3 billion a year earlier.
Written by Phil Allan – 27/10/2015 11:28 am
The boss of Shell’s UK upstream business said the oil and gas industry was still in the “dark ages” when it came to collaboration.
Paul Goodfellow said companies working in the North Sea need to learn from other industries on how to work together.
The Shell boss looked to examples both in Scotland and the US of how collaboration could be driven across the sector.
Goodfellow, who took up his new role earlier this year, pointed to both Aberdeen City and Aberdeenshire Councils in Europe’s ‘oil capital’ and further a field to the shale industry in America.
By LAURA CHESTERS FOR THE DAILY MAIL: 25 October 2015
Britain’s oil giants will this week post their worst set of earnings since the rout in the price of crude began last year.
Investors will also be looking for any update on Royal Dutch Shell’s £55bn takeover of rival BG Group amid fears Shell is overpaying.
Shell, BG and BP will all post third-quarter earnings this week with the City expecting an average of a 60 per cent collapse in profits, according to experts at Morgan Stanley, suggesting the industry is facing its worse downturn in a decade.
Photo Credit: www.alamy.com: Dark days: The price of a barrel of Brent crude has plunged from more than $100 a barrel in the summer of last year to $48 a barrel today
By JON REES, FINANCIAL MAIL ON SUNDAY: 24 October 2015
BP and Shell will this week report billions of pounds wiped off their profits as the effect of the low oil price coupled with expensive exploration failures hammer two of Britain’s biggest companies.
The City expects BP, under chief executive Bob Dudley, to report an underlying profit fall of 60 per cent to £800 million on Tuesday when it unveils results for the three months to the end of September, compared with a profit of £2 billion for the same period last year.
The price of crude oil has nearly halved over the past 12 months because of a Saudi Arabia-led effort by the Opec cartel to crush competition from US shale oil operators.
On Tuesday, BP is expected to say its third-quarter profits have slumped 57.5 per cent to $2.2billion (£1.4billion), with revenues down 47.6 per cent to $49.2billion (£31.9billion), even though analysts believe that its refining, processing and retail divisions have performed well.
On Thursday, arch rival Shell is also likely to produce a weak set of results.
On Thursday, Royal Dutch Shell Plc (LON:RDSA) is expected to post a 55 percent drop in quarterly earnings to £2.65 billion for the three months ended September 30, analysts’ consensus holds.
The slump due to the significantly lower oil price year-on-year will be exacerbated by Shell’s withdrawal from its costly Alaskan adventure. While not specifying the extent of the expected impact, the company noted last month that its Arctic position is worth about $3 billion (£1.97 billion), while it also has about $1.1 billion in “future contractual commitments”. To date, Shell has spent about $7 billion towards furthering its Arctic ambitions.
Britain’s oil giants are preparing to make further cuts to their investment plans in the face of plummeting crude prices.
Shell, like many oil explorers, has already slashed spending and jobs to counteract the effects of a 40pc slump in oil prices in the past year, with the price sliding as low as $43 a barrel from highs of more than $110 in 2014.
However, Shell is this week expected to unveil a new round of cuts alongside its third quarter results, which are set to show a 38pc slump in sales to $67bn (£43.7bn) and a 54pc drop in adjusted earnings.