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Posts under ‘LNG’

Royal Dutch Shell Has Served Notice – The Deepwater Drillers Are In Big Trouble

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June 23, 2016

Screen Shot 2016-05-21 at 10.18.28Summary

  • Eighteen months ago Shell was considering exiting shale plays and focusing on its deepwater and LNG opportunities.
  • Shell’s recent analyst day presentations revealed a company that is shifting its long term focus towards shale.
  • We think that going forward the offshore drilling rig companies have major long term challenges and investors need to be aware that pre-crash cash flows aren’t coming back.

For the small sliver of global oil production that U.S shale oil actually represents it certainly has been a disruptive force.

Total shale production (there is no significant amount outside of the United States) is currently somewhere around 4.5 million barrels per day.

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That is not much more than four percent of total current production which checks in at over 96 million barrels per day.

After having a look at Shell’s (NYSE:RDS.A) 2016 capital markets day presentation we think shale oil is going to become even more disruptive going forward for a select group of companies.

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Shell’s Ambitious Plan To Topple Exxon

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By Rakesh Upadhyay – Jun 22, 2016, 5:17 PM CDT

Ben Van Beurden, Chief Executive Officer of Royal Dutch Shell has laid out an ambitious plan to overtake ExxonMobil as the number one oil company in the world.

Prior to the 1990s, Shell was the leader in total shareholder returns, however, its rivals went on a deal-making spree to gain the lead, while Shell shied away from making any acquisitions. Now, Mr. Beurden believes that Shell will be able to regain its lost glory post the acquisition of the BG group.

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Russia’s Gazprom eyes asset swap deals with Shell, OMV by year-end

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ST PETERSBURG, RUSSIA | BY DENIS PINCHUK AND DMITRY ZHDANNIKOVMon Jun 20, 2016 8:29am EDT

Russia’s state-controlled gas giant Gazprom (GAZP.MM) could gain control over some of the assets that Shell (RDSa.L) acquired earlier this year from BG group, a senior Gazprom executive said in an interview.

Gazprom’s Deputy Chief Executive Alexander Medvedev said the BG holdings could be included in an asset swap deal between Gazprom and Shell that was announced last year. He did not say what the BG holdings were or where they were located.

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Shell puts revamped shale arm at heart of growth drive

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Having turned round its North American shale business, Royal Dutch Shell (RDSa.L) is putting so-called unconventional energy at the heart of its growth plans, and believes lessons from the revamp can be applied across the company.

Greg Guidry, head of the Anglo-Dutch group’s unconventionals business, told Reuters a drive to slash costs and streamline decision-making had put his division largely on a par with leading rivals in terms of productivity and efficiency.

And now the rest of Shell could reap the benefits too.

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Gazprom and Shell committed to broader cooperation in LNG sector

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Gazprom and Shell committed to broader cooperation in LNG sector

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Greenpeace image relating to Shell/Russia Arctic Drilling Plans

June 16, 2016, 17:30

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Ben van Beurden, Chief Executive Officer of Shell, took place today at the St. Petersburg International Economic Forum 2016.

The parties discussed the progress of and prospects for strategic cooperation in the LNG sector, paying particular attention to the construction project for the third production train of the LNG plant on Sakhalin Island (Sakhalin II project). Design and FEED documentation are currently being prepared for the new production train.

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Gazprom, Shell to invest $13 bln in projects in Russia – Russian Energy Minister

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Shell CEO Ben van Beurden bows to Russian President Putin at the Kremlin: April 2014

Thu Jun 16, 2016

ST PETERSBURG, Russia, June 16 (Reuters) – Energy major Shell and Russia’s gas major Gazprom will jointly invest $13 billion in three projects in Russia, Russian Energy Minister Alexander Novak said on Thursday.

Novak said that Shell would take part in the development of Gazprom’s Yuzhno-Kirinskoye gas field offshore Russia’s Sakhalin island in the Pacific.

The two companies will also jointly invest in the Baltic Sea Liquefied Natural Gas plant and in the Sakhalin-2 LNG plant expansion.

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Gazprom, Shell sign memo on Baltic LNG project

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Shell CEO Ben van Beurden bows to President Putin

Thu Jun 16, 2016 8:11am EDT

Gazprom and Shell signed on Thursday a memorandum of understanding on construction of a liquefied natural gas (LNG) plant on the Russian coast of the Baltic Sea.

The memorandum says the companies will look into possibilities of building the LNG plant in the port of Ust-Luga with an annual capacity of 10 million tonnes.

Gazprom and Shell are already partners in Russia’s only LNG plant on the Pacific island of Sakhalin which has a capacity of 10 million tonnes per year.

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Shell & Gazprom agree Baltic LNG project

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Screen Shot 2016-05-21 at 10.18.2816 June 2016 

Russia’s Gazprom and Anglo-Dutch energy major Shell have inked a letter of understanding to begin a liquefied natural gas project at the Russian port of Ust-Luga on the Baltic Sea.

CEOs Aleksey Miller and Ben van Beurden signed the agreement at the 20th International Economic Forum in St. Petersburg.

The project aims to diversify Gazprom’s LNG sales operations and to boost its LNG portfolio.

The enterprise will reportedly include a two-train LNG plant as well as a pipeline connected to the Gazprom network. The Baltic LNG Plant will have a capacity of about 10 million tons of gas annually with an option to expand to 15 million tons. The new plant will start operating in December 2021.

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Russia’s Putin says Shell is long-term, reliable partner

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Screen Shot 2016-05-21 at 10.18.28Thu Jun 16, 2016 11:29am GMT

ST PETERSBURG, Russia, June 16 (Reuters) – President Vladimir Putin said on Thursday Royal Dutch Shell was a long-term and reliable partner for Russia.

Putin, who is attending the annual St Petersburg International Economic Forum, made his remarks after Shell CEO Ben van Beurden asked the Russian leader to help support the company’s Russian business.

Van Beurden said Shell had made a lot of progress in its Sakhalin-2 LNG project with Russian gas giant Gazprom.

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Royal Dutch Shell plc (ADR) to Increase Exposure to LNG Market

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By Staff WriterJun 15, 2016

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) plans to further strengthen its foothold in the liquefied natural gas (LNG) market, as according to Reuters, the company will sign the Baltic LNG project deal with Russian energy giant, Gazprom in the coming days. The multi-billion dollar deal with London-based BG Group has already increased the company’s exposure to the LNG segment.

According to news sources, Shell CEO, Ben van Beurden, will sign the deal at the International Economic Forum in St. Petersburg. Russian President, Vladimir Putin, is also expected to attend the meeting.

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Shell CEO Faces Long Haul in Bid to Pass Exxon as Top Oil Major

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By Rakteem Katakey: June 15, 2016

Royal Dutch Shell Plc Chief Executive Officer Ben Van Beurden spelled out his main goal last week — surpass Exxon Mobil Corp. to become the best-performing oil major. 

“I am determined to get us to that number one place,” he said after outlining the company’s long-term strategy in London. “I want to create a world class investment case for Shell and our shareholders.” 

There are signs Van Beurden is winning over some investors following his record $54 billion acquisition of BG Group Plc. Shell has closed the gap on Exxon for total shareholder returns, which accounts for share prices, dividend payouts and buybacks, after lagging behind for five years. Still, the Anglo-Dutch explorer trails its U.S. rival on a range of other metrics from return on capital and assets to cash flow.

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Russia’s Gazprom, Shell to sign deal on Baltic LNG project – Kremlin

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Screen Shot 2016-06-14 at 16.44.45Tue Jun 14, 2016 1:32pm GMT

MOSCOW, June 14 (Reuters) – Russian gas giant Gazprom and oil major Shell will sign a deal on a planned Baltic liquefied natural gas (LNG) project on the sidelines of a forum in St. Petersburg later this week, Kremlin aide Yuri Ushakov told reporters on Tuesday.

He said the deal will be signed in the presence of Russian President Vladimir Putin, who will meet Shell’s Chief Executive Ben van Beurden at the forum.

Gazprom plans to build the plant, which may produce up to 20 million tonnes of LNG per year, by December 2021.

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Shell, Total look to expand terminals and power plants in new markets

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Written by Reporter – 13/06/2016 6:00 am

Oil majors Shell and Total are said to be considering building terminals and power plants in new markets.

The move comes after companies have invested billions in plants to help produce liquefied natural gas (LNG) in place such as the US and Australia.

Laurent Vivier, president for the gas division of Total, said the company was ready to go downstream “as much as it takes” to unlock gas demand.

He said: “We need to be present in downstream ourselves, to create demand and unlock bottlenecks along the chain including regasification, pipeline and power plants.”

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Coming wave of gas puts focus on finding new shores

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Screen Shot 2016-06-06 at 10.26.15LONDON | BY RON BOUSSO AND OLEG VUKMANOVIC: Sun Jun 12, 2016

Energy giants such as Royal Dutch Shell and Total are looking to build terminals and power plants in new markets to soak up the industry’s rapidly burgeoning supply.

Companies have invested billions in plants to produce liquefied natural gas (LNG) in places such as Australia and the United States.

But gas demand growth is slowing, prices are down and the LNG volumes companies are set to produce will exceed those even major buyers such as China and Japan can absorb.

That has turned attention to the downstream market and opportunities to create new markets from Ivory Coast to remote Indonesian islands by building gas-fired power plants, pipelines, regasification and storage terminals.

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Shell Gas Director Says World Isn’t Oversupplied With LNG Yet

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By Lynn Doan: June 10, 2016 – 10.52 PM BST

Screen Shot 2016-06-06 at 10.26.15For months, banks including Citigroup Inc. have talked about a massive oversupply in the global market for liquefied natural gas. The head of natural gas at Royal Dutch Shell Plc, one of the world’s biggest producers of the fuel, would beg to differ.

“There isn’t really yet the kind of oversupply that people talk about,” Maarten Wetselaar, Shell’s integrated gas and new energies director, said on Friday in an interview in Palo Alto, California. For proof, he said, look at Europe, where natural gas demand gained last year and LNG imports from overseas were little changed.

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Companies charged with workplace breaches following Corrib gas death

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Edwin McGreal: Belmullet: 08 JUNE 2016

Two companies have been sent forward to the Circuit Criminal Court in Castlebar on charges following a workplace accident which resulted in the death of a man working on the Corrib gas tunnel in 2013.

Twenty-six year old Lars Wagner was killed, in September 2013, while he was working on the construction of a tunnel for the Corrib gas project.

Mr Wagner, a German native, was working on boring a tunnel to carry the project’s gas pipeline under Sruwaddacon Bay to the Corrib gas refinery at Bellenaboy.

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Shell to move away from growth in natural gas business

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By IAN BICKIS: The Canadian Press: Tues., June 7, 2016

CALGARY—Royal Dutch Shell says it’s shifting away from growing its liquefied natural gas business, a move that raises fresh doubts about the future of its proposed LNG Canada project in Kitimat, B.C.

The company said Tuesday the pace of new investment in LNG will slow as it moderates growth and prioritizes cash flow generation and returns on existing projects.

Shell said while its integrated gas business was previously a “growth priority,” it has now reached a critical mass after completing the acquisition of gas giant BG Group in February.

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Shell cuts cost for the rest of the decade after takeover

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By DAVID SHANDPUBLISHED: 00:03, Wed, Jun 8, 2016

The company set out its plans to create a “world class investment case” for shareholders following its £35billion takeover of fellow FTSE 100 oil and gas giant BG Group, which will include more asset sales and cost-cutting.

In its presentation to investors, Shell said it would squeeze an extra $1billion (£690million) in savings from the BG deal from an earlier $3.5billion forecast.

It aims to sell 10 per cent of its oil and gas production by exiting operations in up to 10 countries.

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Shell’s Big Find

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Screen Shot 2016-06-06 at 10.26.15By Chris Hughes: June 7, 2016

Shell is learning not to waste a crisis.

The Anglo-Dutch oil major is pulling on every lever to deal with the consequences of agreeing a takeover of rival BG Group just before the oil price collapsed last year. Shareholders can only hope that the zeal it now shows for running a tight ship will endure once the company is on a surer footing.

The $54 billion cash-and-shares purchase of BG was completed in the first quarter, just as the oil price hit rock bottom. As of March 31, Shell’s net borrowings had shot up from $27 billion to $70 billion. Operating cash flow on a 12-month rolling basis was $23 billion — too low for a company then targeting $33 billion of annual capital expenditure and accustomed to paying $10 billion of cash dividends annually, even allowing for a contribution from BG. No wonder analysts have been penciling in dividend cuts.

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Shell asset sales on track, no plans for ‘Baby Shell’ IPO: CEO

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Holly Ellyatt | Stephen Sedgwick: 7 June 2016

Royal Dutch Shell‘s plans to sell off assets and pull out of up to 10 countries are on track, the oil major’s chief executive told CNBC on Tuesday, putting to bed rumors of a spin-off of non-core assets into a “Baby Shell.”

On the company’s capital markets day in London, Shell in a statement said that it was taking action to deliver on lower costs, lower spending. asset sales and “profitable new projects.”

In terms of asset sales, the company confirmed these were expected to total $30 billion for the 2016-2018 period.

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Shell Deepens Spending Cuts, Promises More Savings From BG

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By Rakteem Katakey and Ryan Chilcote: June 7, 2016

Royal Dutch Shell Plc cut spending plans further and promised increased savings following its record purchase of BG Group Plc, as Europe’s largest oil company continues to adjust to the slump in energy prices.

Shell will spend $29 billion this year, it said Tuesday. That compares with a May forecast for capital expenditure “trending toward” $30 billion, which was itself down from an earlier projection of $33 billion. Synergies from the BG acquisition will provide $4.5 billion in savings in 2018, up from an earlier estimate of $3.5 billion.

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Shell caps spending for rest of the decade as belt tightening continues

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By Jon Yeomans7 JUNE 2016 • 9:33AM

Oil giant Shell is targeting yet more cost savings as it looks to pay down debt and protect its dividend in an era of lower oil prices.

The Anglo Dutch giant said today capital spending would be in the range of $25-$30bn a year to 2020. For 2016 it will be $29bn, down from a forecast “trending toward” $30bn, which was itself down from an earlier projection of $33bn.

The company said this spending could go even lower if oil prices sink below their current levels, but crucially would not go higher if oil surges. Crude has stabilised at around $50 a barrel, after hitting a 12-year low of $28 a barrel in January. It was trading at more than $100 two years ago. 

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Shell to exit up to 10 countries after BG deal

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LONDON | BY RON BOUSSO AND KAROLIN SCHAPS: Tue Jun 7, 2016

Royal Dutch Shell (RDSa.L) will exit oil and gas operations in up to 10 countries in a drive to deepen cost cuts and narrow its focus following its $54 billion acquisition of BG Group.

Presenting its strategy following the close of that deal in February, the Anglo-Dutch company outlined plans to target annual spending of $25 billion to $30 billion until the end of the decade.

It lowered its planned 2016 capex to $29 billion in a third cut from an initial $35 billion.

Shell also raised its target for savings from the integration of BG to $4.5 billion, up $1 billion from previous guidance.

Chief Executive Officer Ben van Beurden hopes the new cuts will help boost Shell’s shares, which have underperformed rivals since the BG deal was announced in April 2015.

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Shell share price: Group set to unveil deeper cost cuts

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by Tsveta Zikolova

Monday, 06 Jun 2016, 09:25 BST

Royal Dutch Shell (LON:RDSA) is set to lay out plans for deeper cost cuts and a potential delay in its asset sale programme when it updates investors on its strategy tomorrow, The Sunday Times has revealed. The update will come as the group’s chief executive Ben van Beurden is under increasing pressure to justify the £35-billion acquisition of BG Group which completed earlier this year.

Shell’s share price has advanced in London this morning, having gained 1.55 percent to 1,702.00p as of 08:54 BST, and outperforming the benchmark FTSE 100 index which currently stands 0.73 percent higher at 6,254.90 points. The Anglo-Dutch group’s shares have lost some 10 percent of their value over the past year, but are up more than 11 percent in the year-to-date.

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Can This Troubled LNG Project Still Deliver for Chevron, ExxonMobil, and Royal Dutch Shell?

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By Jay Yao: Jun 4, 2016

Australia’s Gorgon LNG is one of the largest liquefied natural gas projects in the world. When complete, the Gorgon is expected to produce 15.6 million metric tons of LNG a year and last for 40 years. For Australia, the Gorgon was supposed to add hundreds of billions of dollars to Australia’s GDP and employ thousands of people. For the companies that invested, Gorgon was supposed to be one of the cornerstones of their LNG portfolios and deliver long-lasting shareholder value.

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Shell News Stories from Australia

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Angela Macdonald-SmithEnergy Reporter: June 6, 2016

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NSW and Victoria may have to consider importing LNG from Queensland or Papua New Guinea if the states don’t act to get onshore gas out of the ground, even though it would be a costly solution to the current stalemate, Shell Australia chairman Andrew Smith has suggested.

Mr Smith told the APPEA oil and gas industry conference in Brisbane on Monday that the time has come to “think creatively” about how best to serve local gas customers to ensure they have adequate and reliable supplies.

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Report suggests Shell may be about to reveal more cost-cutting

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Screen Shot 2016-05-21 at 10.18.28Written by Keith Findlay – 06/06/2016 7:09 am

Oil giant Shell may be about to announce further cost cutting and a possible delay to its plans to offload assets, a report said yesterday.

Chief executive Ben van Beurden is under “increasing pressure” to justify the firm’s £35billion takeover of BG Group in the middle of a severe oil and gas industry slump, it added.

Shell is holding a capital markets day for investors tomorrow and it is thought it may update on its sale plans and fresh cost-cutting then.

Last month, Shell chief financial officer Simon Henry said cost levels in the North Sea needed to come down “substantially”.

Action already taken to integrate BG within Shell’s operations, including job cuts, were “probably about it for now” but he did not rule out further headcount reductions.

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Nigeria: Unabating Sleaze in the Oil Sector

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29 MAY 2016: This Day (Lagos)

The 2013 audit report of financial and process activities in Nigeria’s oil industry which the Nigeria Extractive Industries Transparency Initiative (NEITI) released last Monday shows nothing has really changed in the way Nigeria runs her oil industry. Chineme Okafor reviews the report

“It is important to re-state that these reports covered the year 2013. Clearly, a few things have or could have changed since then.

“But it is clear that despite the gap of three years, most of the issues raised in the reports are still relevant today and should guide us on the way forward,” said Minister of Solid Minerals and chairman of the board of NEITI, Dr. Kayode Fayemi.

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Transportation emerges as new hope for LNG demand growth

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Angela Macdonald-SmithEnergy Reporter: 29 May 2016

A move to cleaner transportation fuels could mop up the surplus in the global liquefied natural gas market more quickly than anticipated and open up a new growth market for producers such as Woodside Petroleum.

Woodside is following major Royal Dutch Shell in positioning itself to benefit from increased use of gas in road transport and shipping.

Demand for LNG from the transport sector could reach 24.4 million tonnes a year by 2020, representing a 7 per cent rise from estimated global demand, according to new findings from Bernstein Research.

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Dutch Take On Gazprom in Battle Over Europe’s Oil-Linked Gas

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Screen Shot 2016-05-13 at 10.52.28The legal action coincides with government curbs on output after earthquakes in the Netherlands…

By Kelly Gilblom: May 18, 2016

In its new role as a natural gas importer, the Netherlands wants to make sure it doesn’t overpay.

GasTerra BV, the nation’s biggest buyer and seller of gas, initiated arbitration against Gazprom PJSC’s export unit, the Russian company said Monday. It is seeking a price review for fuel purchased from Europe’s largest supplier under a long-term contract linked to oil, which has rallied this year as the price on gas hubs extended declines.

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The legal action coincides with government curbs on output after earthquakes in the Netherlands, home to the European Union’s largest gas field, which turned it into a net importer of the fuel. Utilities from Germany’s RWE AG to Turkey’s Botas Boru Hatlari Ile Petrol Tasima AS filed arbitration claims against Gazprom PJSC’s export unit after market prices fell below contract rates, with EON SE and Engie SA settling cases with Europe’s biggest gas supplier this year.

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Shell Looks to Offload $40B In Non-Core Assets

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May 17, 2016

Royal Dutch Shell plc (NYSE:RDS.A) is divesting US$40 billion in non-core assets in its attempt to cut capital expenditures and raise cash in a desperate attempt to right its balance sheet wrongs after its takeover of BG Group plc earlier this year left it strapped for cash and laden with nearly US$81 billion worth of debt.

The costly merger at a time of depressed oil prices has rendered Shell the largest publicly owned company in the UK and the largest producer of liquefied natural gas (LNG) in the world.

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Royal Dutch Shell Plc casts fresh doubt on B.C. LNG project due to funding

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Yadullah Hussain | May 5, 2016 6:37 PM ET

Royal Dutch Shell Plc. has cast doubts its liquefied natural gas export project in British Columbia will secure a final investment decision (FID) by the end of this year, further dashing the province ’s hopes of shipping LNG by 2020.

Shell’s LNG Canada in Kitimat is competing for funding dollars with two other company LNG projects, both in the United States, as well as with a chemicals plant in Pennsylvania, within the next 12 months, chief financial officer Simon Henry told investors during a conference call Wednesday.

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Shell cuts billions from spending plans

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Screen Shot 2016-04-20 at 13.50.03Robin Pagnamenta, Energy Editor: May 5 2016

Royal Dutch Shell has accelerated plans to shave billions more dollars from its capital spending this year, as it continues to digest its $54 billion acquisition of BG Group.

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Shell sees slower roll-out of floating LNG

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Mr Henry said Prelude “remains on track to deliver some material cash flow in 2018,” signalling the venture still has some way until start-up.

Angela Macdonald-Smith: Energy Reporter:May 5, 2016

Royal Dutch Shell acknowledges the roll-out of its floating LNG technology will occur much more slowly than anticipated a few years ago, leaving its ground-breaking Prelude venture in WA as potentially its sole FLNG venture for several years.

Shell had targeted a conveyor belt of huge FLNG vessels running of the production line in South Korea, being deployed at remote gas fields worldwide, with several in waters around Asia.

But three projects that could have used five new FLNG vessels have been halted in their tracks, leaving the $US12 billion Prelude venture Shell’s only one for the forseeable future. FLNG ventures planned by other companies in Australia have also fallen foul to cost and price issues.

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Shell’s BG Risk Starts to Pay as Output Added, Costs Slashed

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By Rakteem Katakey: May 4, 2016

Royal Dutch Shell Plc’s record $54 billion acquisition of BG Group Plc is starting to pay off as the assets give it higher production and cash flow, helping it beat analysts’ earnings estimates when it reported quarterly results Wednesday. 

While Europe’s biggest oil company benefits from BG’s assets, it’s cutting expenses quickly enough to ensure the takeover isn’t adding any new costs. Shell’s forecasts for capital spending and operating expenses this year are now at the same level they would have been even if it hadn’t bought BG, Chief Financial Officer Simon Henry said. A majority of the 16 percent increase in oil and gas output came from the acquisition.

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Shell finance chief refuses to rule out further North Sea job losses

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Screen Shot 2016-04-25 at 15.56.32Written by Phil Allan – 04/05/2016 12:34 pm

Shell’s finance chief has refused to rule out further job losses in the North Sea as the oil giant announced its earnings had dropped by $4billion dollars in the first quarter of 2016.

Chief financial officer Simon Henry said the voluntary redundancy packaged announced recently announced as a result of Shell’s acquisition of BG Group, may not be the last to affect the North Sea as the company continues to look at cut costs from its global operation.

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Shell profits tumble following BG merger

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By Jillian Ambrose4 MAY 2016 • 8:32AM

Shell posted a sharp fall in profits in its first set of results since merging with global gas giant BG Group, but nevertheless beat expectations against a backdrop of low oil prices.

The oil major reported first quarter profit of $455m, less than half the $942m posted in its results for the last three months of 2015 and a fraction of its $4.5bn for the same period last year.

On a cost of supplies basis, which the oil industry uses to account for fluctuations in the price of oil, Shell made $1.6bn over the first quarter of the year. This was better than analyst expectations of just over $1bn but still well below the $3.7bn in the first quarter of 2015.

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Shell cuts spending further after BG deal

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LONDON | BY RON BOUSSO AND KAROLIN SCHAPS:Wed May 4, 2016

Royal Dutch Shell (RDSa.L) on Wednesday cut its 2016 spending by another 10 percent after completing the $54 billion acquisition of BG Group, warning that low oil prices will continue to weigh.

In its first earnings results since the Feb. 15 deal that transformed it into the world’s top liquefied natural gas producer, Shell reported better-than-expected first-quarter results despite a 58 percent drop in profits.

Reflecting the deal, Shell said it sold 12.29 million tonnes of LNG in the first quarter, up 25 percent year on year. Shell’s overall oil and gas output rose 16 percent.

Shell, however, warned that low oil and gas prices, significant maintenance at production sites as well as “substantial redundancy and restructuring charges” will impact second-quarter earnings.

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Shell’s blockbuster BG bid backfires as gas prices deflate

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Danny Fortson:    Published 1 May 2016

Nearly 300 staff gathered in the canteen of BG Group’s sprawling headquarters in Reading on Monday morning to hear what they had long been expecting: nearly all of them were being laid off or being forced to apply for new jobs.

Shell closed its blockbuster takeover of the gas giant in February. Huibert Vigeveno, a rising star within Shell charged with integrating the companies, announced that after an “office footprint review”, BG’s headquarters would shut.

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Profit fall leaves Shell struggling to justify BG deal

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Danny Fortson Published: 1 May 2016

Royal Dutch Shell is set to unveil a steep fall in profits this week, laying bare the challenge for chief executive Ben van Beurden to justify his £35bn takeover of rival BG.

Shell completed the blockbuster deal in February after investors voted it through. Despite counting six weeks of BG’s earnings, analysts expect Europe’s largest oil company to have earned just $1bn (£680m) in profits for the quarter. That compares with a surplus of $3.2bn for the same period a year ago.

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Gazprom and Shell address ongoing and future cooperation

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Screen Shot 2016-04-29 at 21.31.46Friday, Apr 29, 2016

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Ben van Beurden, Chief Executive Officer of Shell, took place in St. Petersburg today.

The parties addressed the prospects for collaboration between the companies under the Agreement of Strategic Cooperation. An emphasis was placed on a potential asset swap.

The meeting also reviewed the ongoing front-end engineering design (FEED) process for the third production train of the LNG plant within the Sakhalin II project.

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Samsung Heavy loses $4.6-billion FLNG order from Shell on oil drop

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Screen Shot 2016-04-20 at 13.50.03By KYUNGHEE PARK on 4/28/2016

SUNGNAM, South Korea (Bloomberg) — Samsung Heavy Industries Co., the world’s third-largest shipbuilder, said an order to build three floating LNG production facilities was canceled after the energy development project was scrapped amid a plunge in oil prices.

The contract, valued at 5.27 trillion won ($4.6 billion), from Royal Dutch Shell was voided because of the current difficult market conditions, the Sungnam, South Korea-based company said in a regulatory filing Thursday. The shipbuilder won the deal in June on the condition that the project will start only after the client is ready to proceed.

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Shell cancels huge $4.6bn FLNG order at Samsung

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Shell starts staff cut discussions with employees in Australia

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Business | Wed Apr 27, 2016 

Shell (RDSa.L) has started discussions with employees in Australia about job reductions, the company said on Wednesday, as part of plans to cut 10,300 jobs worldwide to lower costs.

“Shell last week commenced conversations with employees about business efficiency and staffing levels – as a result of combining it with the previously BG-owned QGC – a process that will lead to job reductions,” a spokesman said.

Shell is in the process of integrating assets it acquired as part of its $50 billion (£34.2 billion) takeover of gas producer BG Group, including BG’s Australian subsidiary QGC.

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Shell to axe jobs as cost-cuts hit home

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Shell last week informed local staff that it was starting a round of job cuts, with a large portion of workers within the company asked to re-apply for their current positions.

While no fixed target has been set, it is estimated that about 250 jobs around Australia are likely to go as a result of the changes.

The round of job cuts follows Shell’s recent takeover last year of BG Group. The redundancies will remove many of the overlapping roles inherited through the takeover.

Shell had already flagged that it would axe about 2800 jobs worldwide as a result of the BG takeover, as well as a further 7000 around the globe as part of its response to the plunge in oil and gas prices.

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Shell defies order to halt production at Nigeria facility – officials

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YENAGOA, NIGERIA | BY TIFE OWOLABI: Wed Apr 20, 2016

Royal Dutch Shell has failed to halt production at the Gbaran Ubie oil and gas facility in southern Nigeria, contravening a court order for the site to be sealed and raising the prospect of legal action, state government officials said on Wednesday.

A Reuters reporter spoke to workers at the plant who also said production had continued.

A Shell (RDSa.L) spokesman declined to comment.

The facility, in the oil-rich southern Niger Delta region, supplies the Bonny liquefied natural gas (LNG) export terminal and also helps generate electricity, which is scarce in Africa’s top oil producer and most populous nation.

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Exclusive: How ChemChina tried to gatecrash Shell’s BG mega-deal

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Screen Shot 2016-03-15 at 10.28.52LONDON | BY DMITRY ZHDANNIKOV, FREYA BERRY AND RON BOUSSO: Business | Tue Apr 19, 2016

Chemical giant ChemChina approached BG Group with a possible bid late last year, just as Royal Dutch Shell was preparing to close a $52 billion deal to buy the British energy company, seven banking and industry sources with knowledge of the matter said.

Working with investment bank HSBC (HSBA.L), China’s most acquisitive company of the past year flew a delegation to Britain in December and approached BG Chairman Andrew Gould with plans for a full cash bid, two sources close to ChemChina said.

Shell and HSBC declined to comment. ChemChina did not immediately respond to requests for comment. Reuters could not reach Gould for comment.

That trip was eight months after Shell announced the energy sector’s largest deal in a decade and just weeks before the BG purchase received final anti-trust and shareholder clearances.

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Project Prelude – A case study in the generation of real material debt

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Comment By Bill Campbell (Retired HSE Group Auditor Royal Dutch Shell International) on the article published in The Australian: “Shell chief Ben van Beurden backs FLNG program

Interesting use of terminology by BvB, real material cash, what other type is there rather than funny money.

Prelude dumped from super star gamechanger status to important tool, an aspirin rather than a panacea for all ills, has certainly generated, and it appears will continue to generate, something of a debt mountain for RDS. $15 billion and counting has been allocated to finance the venture outflowing since at least 2007/8 at commencement of conceptual and then detailed design. I may be wrong, but I thought the production start date was given at the time when the first metal was cut in the yards in 2010, as 2016 – now it will be a least 10 years till 2018 before the project will start generating revenue. Our esteemed contributor London Lad, who knows a thing or three about project economics, will confirm, if he feels so inclined, that the breakeven point in any project is determined by how quickly capital spending is halted and operational revenue creation is started. The viability of the project per se, as to whether it will ever add value or be a financial millstone, is determined when production eventually starts by the rate of return of the capital invested, and here BvB hopes for real material cash, and lots of it, and hopefully by 2018 the cash will start to flow. Anybody guess how long it will take for this Project to breakeven?

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Buhari urged to stop work on Egina FPSO

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A Lawyer, John Owubokiri, has urged President Muhammadu Buhari to order contractors handling the construction of the Total’s Egina floating production, storage and offloading (FPSO) vessel to stop work on the platform until all the legal issues are resolved.

Owubokiri, who is a principal partner, Owubokiri & Co, said Buhari recognises the rule of law and due process, therefore, flagrant disrespect of the law by the owners of the Egina project should be dealt with to deter future occurrence.

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Shell Australia chairman Smith urges LNG industry to drop ego and collaborate

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Angela Macdonald-SmithEnergy Reporter: 15 April 2016

Shell Australia chairman Andrew Smith is set to call on LNG industry leaders to drop their egos and get serious about collaboration to reduce costs, deliver better returns and improve competitiveness.

“We must put collaboration ahead of our industry’s natural desire to immortalise our own activities in concrete and steel,” Mr Smith will tell the LNG18 conference in Perth on Friday.

“Australia’s LNG industry will deliver greater economic value and better international competitiveness when we get better at the sharing of infrastructure on commercial terms.”

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