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Oil rivals cooperate to slash equipment costs: Shell

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LONDON | BY RON BOUSSOThu May 5, 2016

Ten oil companies including Royal Dutch Shell (RDSa.L), Chevron (CVX.N) and BP (BP.L) are working together to develop standard production equipment, a rare cooperation among rivals to save money as low oil prices put pressure on budgets.

Bespoke valves, paints and underwater equipment are among the items that could be mass-produced at a cheaper cost, Harry Brekelmans, Shell’s Projects and Technology Director told Reuters.

The companies also want to set up institutions to find future savings after the past two years’ industry downturn led to a near standstill in new project approvals.

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More North Sea job cuts on the cards at Shell

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Screen Shot 2016-05-05 at 10.07.35BY MARK WILLIAMSON: Thursday 5 May 2016

ROYAL Dutch Shell’s finance chief, Simon Henry, has said there could be more job losses in its North Sea business amid the crude price plunge but the company has no plans to move activity from the Glasgow shared service centre where 450 people work.

As the oil and gas giant posted a 58 per cent fall in first quarter profits, to $1.6 billion (£1.1bn), Mr Henry said Shell wanted to take more cost out of its UK business despite shedding 500 North Sea jobs since the oil price started tumbling in 2014.

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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 cuts spending as profits fall

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The oil firm said it would reduce investment to $30bn from a planned $33bn, after coming under pressure from shareholders to cut costs.

Shell also said profits in the three months to March had fallen to $800m from $4.8bn a year earlier.

Oil prices have fallen sharply over the past 18 months.

On average, in the first three months of 2016 oil prices stood at about $35 a barrel, down from a peak of $115 a barrel in June 2014.

Excluding one-off items, Shell’s preferred measure of profit, earnings fell to $1.6bn from $3.8bn in the quarter.

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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 Q1 earnings slump to $800m

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Royal Dutch Shell (LON:RDSA) has updated investors on its first-quarter performance this morning, unveiling a hefty drop in earnings, with the oil price rout weighing on the company’s results.

Highlights from Shell’s statement:

Following completion of the acquisition on February 15, 2016, BG Group plc (“BG”) has been consolidated within Royal Dutch Shell’s results. For all practical purposes, this includes February and March 2016, as the impact for the first half of February is deemed immaterial.

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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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Shell to close BG head quarters near London by year end

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As part of the 10,300 job cuts it has already announced, 2,800 will come from the integration of BG and 7,500 from its existing staff and direct contractor base.

Business | Mon Apr 25, 2016 

Royal Dutch Shell (RDSa.L) will close the head office of BG Group, the gas producer it agreed to acquire for $50 billion in February, by the end of the year, it said on Monday, as part of a plan to save costs and cut 10,300 jobs worldwide.

The oil major will also offer voluntary redundancy packages to staff at the BG headquarters in Reading, near London, and to Shell staff in the UK.

This follows a similar announcement made to Dutch staff earlier this month.

The oil company is under intense pressure to rein in costs as a slump in oil prices has hit its profits.

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Investors look beyond Big Oil’s worst quarter yet

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LONDON | BY KAROLIN SCHAPS AND RON BOUSSO: Sun Apr 24, 2016

The world’s top oil companies are set to report their worst quarterly results yet in the current downturn but a recent recovery in crude prices is raising hopes the market has bottomed out.

An ever intensifying oil supply glut took global prices to a near 13-year low of $27.10 a barrel on Jan. 20, exacerbating pressure on oil producers already grappling with a more than 70 percent slide in prices since mid-2014.

“The 1Q16 reporting period looks set to be even worse than what we thought was already an especially ugly 4Q15,” said Jason Gammel, equity analyst at Jefferies.

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Oil prices drop faster than companies can cut costs

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Bloomberg News: SATURDAY, APRIL 23, 2016

The world’s biggest oil companies, set to report their worst quarterly earnings in more than a decade, are finding that their cost-cutting efforts haven’t matched the decline in crude prices over the past two years.

While producers have been deferring projects, eliminating jobs and freezing salaries, the process will take three years to complete, according to Barclays oil sector analyst Lydia Rainforth. In the meantime, profits are being hammered.

“A lot of work still needs to be done on costs,” she said. “It’s a reflection of how much costs had piled up and how long a process this is.”

For producers from Royal Dutch Shell to Chevron, reeling under the threat of credit-rating downgrades, slashing costs is the surest way of protecting balance sheets. Still, reversing course is proving painful after $100 oil persuaded companies to pump money into expensive areas in search of new deposits, hire more people and rent rigs and services at record rates. Productivity suffered.

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Nick Goodway: Why do we pay Shell to extract our oil assets?

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By Nick Goodway: 19 April 2016

My eye was caught yesterday by a document from Royal Dutch Shell snappily entitled Report on Payments to Governments for 2015. (I know, I don’t lead a very exciting life.) This is one of the myriad new reports that corporates are forced to release each year in the interests of greater transparency and good governance.

But for once, alongside the hundreds of such reports I have binned, there was some interesting stuff here. In short, the report details how much Shell paid to each government in the countries in which it operates in terms of their share of production, royalties, taxes and fees.

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Why Now May Be The Time To Sell Royal Dutch Shell Plc

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By Royston Wild : The Motley Fool – Thursday, 14 April, 2016

Despite my repeated warnings of impending doom, share prices of many of the Footie’s commodity and retail giants have been carried higher again against a backcloth of giddy investor appetite.

Diversified commodities play Anglo American (LSE: AAL) has seen its share price explode 160% during the past three months, while oil giant Shell (LSE: RDSB) has enjoyed a 31% rise. Grocery house Tesco (LSE: TSCO) has seen its share value advance by a more modest 7% during the period.

But a recovery from January’s multi-year lows does not suggest that these stocks are on the cusp of a stunning turnaround. As legendary economist John Maynard Keynes’ famously pronounced: “the market can stay irrational longer than you can stay solvent.”

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Shell Could Save $4.5 Billion by Matching BP Productivity: Chart

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Screen Shot 2016-03-15 at 10.34.57By Rakteem Katakey: April 12, 2016

Royal Dutch Shell Plc could reduce operating costs by as much as $4.5 billion a year if its employees matched the productivity of BP Plc, according to Morgan Stanley.

Shell’s output per employee in oil and gas exploration and production was 26 percent lower than BP’s last year, meaning Europe’s biggest oil company has scope to cut about 9,000 jobs in that division, Morgan Stanley analysts including Martijn Rats wrote in a report dated April 8.

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Royal Dutch Shell plc: Reasons Behind Moody’s Downgrade

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By Micheal Kaufman on Apr 11, 2016

Moody’s Investor Service reduced Shell’s issuer rating and rating of its guaranteed debt from “Aa1” to “Aa2”, and affirmed company’s Prime-1 commercial paper. Both ratings were under review for a potential downgrade, which was initiated on January, 22, 2016. Since January, the firm expected that the global oil prices will remain weak over the medium term and hinted several downgrades in the upcoming few months.

Shell Finance Netherlands Bv, a subsidiary of Royal Dutch Shell – formed for the sole purpose of issuing debt – also had its issuer rating cut from “Aa1” to “Aa2”. Moreover, Shell’s US-based subsidiary, Shell Oil Company, also got its issuer rating cut from “Aa2” to “Aa3” and has been assigned a Negative outlook.

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Moody’s downgrades Royal Dutch Shell to Aa2 negative outlook

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Markets | Fri Apr 8, 2016

* Moody’s downgrades Royal Dutch Shell to aa2; negative outlook

* Ratings downgrades and negative outlook reflect Shell’s elevated leverage following the BG acquisition

* Under a low oil price scenario, we expect Shell to generate negative free cash flow at least through 2017

* Downgrade of Shell’s ratings is driven by expectations of negative free cash flow and weaker cash flow-based metrics at least through 2017

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Shell under pressure to reduce spending

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Markets | Fri Apr 8, 2016 3:05am EDT

By Ron Bousso

LONDON, April 8 Royal Dutch Shell is under pressure from shareholders to cut annual spending below $30 billion after buying BG Group to ensure it can maintain its dividend given the slow oil price recovery.

Shell and other large oil companies slashed budgets, scrapped huge projects and cut tens of thousands of jobs last year in the face of a slump in oil prices from a June 2014 peak of nearly $116 a barrel to below $40.

Shell reduced spending by $8.4 billion to $28.9 billion last year and for the first time in more than three decades global capital spending in the oil and gas industry, known as capex, is set to fall for a second year in a row.

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Oil giants replace 75pc of production in 2015

Screen Shot 2016-03-28 at 11.18.24By SARAH KENT: March 27, 2016

LONDON—The world’s biggest oil companies are draining their petroleum reserves faster than they are replacing them—a symptom of how a deep oil-price decline is reshaping the energy industry’s priorities.

In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. It was the biggest combined drop in inventory that companies have reported in at least a decade.

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Is It Finally Time To Give Up On Royal Dutch Shell Plc?

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By Royston Wild – Thursday, 24 March, 2016

To suggest the game is up at Shell (LSE: RDSB) could be considered ludicrous given the investor stampede of recent weeks.

The fossil fuel giant has seen its share price explode 30% in the past two months, moving in lockstep with the Brent benchmark’s surge back above the $40 per barrel milestone.

But with data surrounding the oil sector still worsening, I see little reason for crude’s recent march higher, leaving Shell’s share price in danger of a massive reversal.

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Better news for oil

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Screen Shot 2016-03-16 at 22.36.32By Ed Crooks: Friday 18 March 2016

Oil continued to creep up this week with Brent going past $42 per barrel, its highest level since early December. Crude was a beneficiary of the wider upturn in markets, which pushed the S&P 500 index briefly back up above its level at the start of the year. The positive correlation between share prices and oil prices seems to be alive and well.

Suggestions that the US Federal Reserve is in no hurry to raise interest rates gave a boost to crude and other markets. Oil was also helped by reports that Opec ministers had at last agreed to hold a meeting with leading non-Opec producers such as Russia, in an attempt to make some progress with their much-discussed, little-implemented production freeze.

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Is Royal Dutch Shell Plc In Danger Of A Colossal Correction?

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Screen Shot 2016-02-17 at 08.47.47By Royston Wild – Thursday, 17 March, 2016

Shares across the mining and energy sectors have leapt broadly higher in recent weeks thanks to a robust recovery in commodity prices.

Fossil fuel leviathan Shell (LSE: RDSB) has been one of these beneficiaries. Since striking a 12-year trough of 1,277p per share back in January, the stock has leapt 33% to claw back above the 1,700p marker just this week.

Shell’s resurgence has been underpinned by a bounceback in the oil price. The Brent benchmark reclaimed the $40 per barrel marker earlier this month,  up from the multi-year lows of $27.67 hit at the start of 2016.

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Market Report: Goldman Sachs joins supporters of Shell

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JAMIE NIMMO: Friday 11 March 2016

Goldman Sachs became the latest bulge-bracket broker to throw its weight behind Royal Dutch Shell shares after the oil giant’s mega-merger with BG.

The US bank added the supermajor to its hallowed Conviction Buy list, suggesting that more disciplined spending will help protect its rich dividend, which makes it a favourite for pensions and long-term savers.

The company is still set to splash out more than $30 billion (£21 billion) this year, joining only Petrochina above that level, but Goldman expects this budget to shrink from 2017.

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Shell names Lazard to advise on $30 billion asset sales

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LONDON | BY FREYA BERRY AND RON BOUSSO:

Business | Fri Mar 11, 2016 11:14am GMT

Royal Dutch Shell has appointed investment bank Lazard to advise it on a $30 billion (£21 billion) asset sale programme following its acquisition of BG Group last month, several banking and industry sources said on Friday.

The Anglo-Dutch company has also picked Bank of America Merrill Lynch and Morgan Stanley to work on proposed sales of assets, according to the sources, noting that more banks could yet be added to the line-up.

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Shell boss takes £300k pay cut after plummeting oil price led to 10,000 job cuts

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By EMILY DAVIES FOR THE DAILY MAIL: 11 March 2016

Shell’s boss has taken an 8 per cent pay cut after a year in which the firm was hit by plummeting oil prices and cut 10,000 jobs.

Chief executive Ben van Beurden’s salary fell from £4.4m in 2014 to £4.02m in 2015.

His total pay and benefits for the past year was £4.3m, a whopping fall from £18.7m in 2014 – though this huge pay packet was largely due to a one-off contribution to his pension following promotion to the top job.

Van Beurden’s pay is in sharp contrast to BP boss Bob Dudley who saw his 2015 pay rise almost a fifth to £13.8m – despite overseeing the company’s worst ever results with losses of £3.6bn.

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Shell boss Ben van Beurden bags a bigger bonus despite falling oil price

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RUSSELL LYNCH: 10 MARCH 2016

Royal Dutch Shell boss Ben van Beurden got a bigger bonus in 2015 — up 6% to €3.5 million (£2.7 million) — even though a tumbling oil price sank the shares by 30% last year.

The chief executive landed an overall pay deal of £5.6 million — although this was lower than 2014, when his package was swollen to €24.2 million by tax handouts and pension payments on taking the helm at the oil major.

Shell’s latest annual report showed his 2015 basic pay up to €1.47 million, but his annual bonus rising from €3.3 million to €3.5 million for a year in which van Beurden masterminded the oil giant’s mega-merger with rival BG.

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Shell CEO van Beurden’s remuneration fell in 2015

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LONDON: Business | Thu Mar 10, 2016

Royal Dutch Shell (RDSa.L) Chief Executive Ben van Beurden’s total direct remuneration fell 8 percent last year to 5.135 million euros ($5.63 million), the company said in its annual report.

His total package, including pension and tax equalisation, was 5.576 million euros, down from 24.198 million euros in the previous year, mainly due to a significant fall in van Beurden’s pension which was positively affected in 2014 by promotion to chief executive.

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Shell Seen as Best Oil Major Wager by Analysts After BG Deal

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Screen Shot 2016-02-17 at 08.47.47By Rakteem Katakey: Bloomberg.comMarch 9, 2016

Ben Van Beurden staked his reputation on Royal Dutch Shell Plc’s $53 billion acquisition of BG Group Plc as crude slumped. Analysts are rewarding the chief executive officer by putting the enlarged company in pole position to exploit a market upturn. 

Shell’s shares will rise about 12.2 percent in the next 12 months, the most among the world’s six biggest non-state oil companies, according to the target prices of analysts compiled by Bloomberg. More than 65 percent of analysts who cover Europe’s largest oil producer recommend buying the stock, the highest share among its peers.

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Are BP and Royal Dutch Shell Refinery Segments in Trouble?

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By Muhammad Ali Khawar on Feb 26, 2016

The oil and gas companies have been severely hit by a more than 70% crash in crude oil prices over the past one and a half year. Their only saving grace, however, is the high refinery margin. In 2015, the falling revenue of oil giants from the upstream segment — the likes of Exxon Mobil Corporation (NYSE:XOM), Shell, and BP — was offset by the high margins from the refinery segment.

Bidness Etc here discusses whether in 2016, the energy companies will continue to enjoy the oil refinery boom, or the glut in the downstream segment would weigh down the energy companies’ performance.

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Scant hope of an imminent rebound in prices

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The Davos of energy

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By Ed Crooks: February 26, 2016

This week many of the biggest names in the worlds of oil, gas and power were gathered at IHS CeraWeek in Houston, the annual conference that is regularly  – and accurately – described as “the Davos of energy” or  – more questionably – as “the Burning Man of energy”. It should come as no surprise that it was this event that generated most of the week’s big stories.

The star of the show was Ali al-Naimi, Saudi Arabia’s formidable oil minister, who was making his first appearance at the conference since 2009. It might have been expected to be a case of Daniel in the lions’ den. Saudi Arabia is seen by many in the industry as the architect of their troubles, because of Mr Naimi’s refusal to cut production to attempt to support prices. As it turned out, though, he won over the crowd very quickly, delivering a speech that included both a convincing explanation of his strategy, and a few pretty decent jokes.

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For Exxon and Shell, Age of Ultramajors Comes at the Wrong Time

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As oil and gas prices have tumbled, Exxon and Shell have been forced to retreat. With oil barely above $30 a barrel, they’re cutting spending, including some costly, high-risk mega-projects. Photographer: George Osodi/Bloomberg

By Javier Blas: Bloomberg.com: 24 FEB 2016

Despite their size, both companies suffering with cheap oil

Exxon and Shell cutting spending as fast as everyone else

Screen Shot 2016-02-24 at 07.54.19This may not be the best time to be bigger than big.

The $64 billion tie-up of Royal Dutch Shell Plc with BG Group Plc and the steady growth of Exxon Mobil Corp. are creating a new league of two: the ultramajors. Executives at smaller companies are even starting to joke that Chevron Corp., Total SA, BP Plc, ConocoPhillips and ENI SpA are merely the mid-cap sector of Big Oil.

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Dividends On A Knife-Edge: Royal Dutch Shell And BG Group

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Extracts from an article by Nigel Kelly: 19 FEB 2016

Summary

RDS acquired BG Group on February 15, 2016.

The BG shares have been delisted.

RDS/BG now yields over 7.5%.

$60B is required Annually to cover Capex, Debt, Dividend and other Cash Commitments.

Its Cashflow from Operations is only $30B.

Background

Royal Dutch Shell completed its acquisition of BG Group on Feb 15th 2016. The full year 2015 results for both companies have been released in recent weeks. I wanted to review the full years earnings reports and assess the dividend safety for the combined entity.

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Fitch downgrades Shell on BG takeover

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by Veselin ValchevFriday, 19 Feb 2016

Credit ratings agency Fitch downgraded Royal Dutch Shell Plc (LON:RDSA) by one notch to “AA-“, with a negative outlook, in response to the successful completion of the costly BG Group merger. The agency considers that adding BG’s business to the group has “deteriorated” Shell’s financial profile.

The £36bn takeover included a £13bn cash component, which Shell covered with resources at hand. The Anglo-Dutch oil major said in its Q4 results earlier this month that it had $31.75bn in cash or cash equivalents in reserve at the end of 2015.

Shell plans to restore its balance sheet strength with an ambitious $30bn disposals programme, in addition to cutting billions in capex and opex from the combined group’s spending, while further synergies from the merger are projected to save up to $3bn per year.

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Stung by Low Oil Prices, Companies Face a Reckoning on Debts

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The oil industry regularly undergoes booms and busts. But the downside of this cycle may prove more extreme…

By CLIFFORD KRAUSS and MICHAEL CORKERYA version of this article appears in print on February 10, 2016, on page A1 of the New York edition

MIDLAND, Tex. — On the 15th floor of an office tower in Midland looms a five-foot-long trophy black bear, shot by the son of an executive at Caza Oil & Gas. But it is Caza that has recently fallen prey to a different kind of predator stalking the Texas oil patch: too much debt.

While crude prices have dropped more than 70 percent over the last 20 months, a reckoning in the nation’s vast oil industry has only just begun. Until recently, companies were able to ride out the slump using hedges to sell their oil for higher than the low market prices.

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Shell: Industry faces major renaissance

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Written by Rita Brown – 09/02/2016

The industry is in the crux of its own renaissance as it grapples with job losses, low oil price and lagging efficiency, according to Shell’s project & technology director.

Speaking at GE’s annual meeting in Florence, Harry Brekelmans said: “Florence is the birthplace of the renaissance, the time of exploration of discovery and great inventions and of course the oil and gas industry is in need of its own renaissance.

“This will be how we collectively respond to the tough business environment we find ourselves in.

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Why Oil Production in Ogoniland is Still Impossible

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Why Oil Production in Ogoniland is Still Impossible

By Fegalo Nsuke: 

Shortly after the hangings on 10 November 1995, Shell Oil Company set up an Ogoni Re-entry department to help the company break the Ogoni resistance and pave the way for the resumption of oil mining in the area. That was Shell’s immediate response to the plight of the Ogoni people after the brutal killings of 9 leaders by the Nigerian government in 1995.

The government and Shell had thought that Saro-Wiwa’s killing would frustrate the Ogoni and ease the resumption of oil mining in Ogoniland. That was not to be as the people have consistently and persistently held on to the oil till date except in cases where agents of Shell have been reported to be stealing the Ogoni oil.

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As Big Oil shrinks, boards plot different paths out of crisis

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Screen Shot 2016-02-07 at 09.14.51* Companies seek to safeguard growth for when market recovers

* U.S. firms abandon deepwater projects for shale oil fields

* Britain’s BP bets on Egyptian gas, Shell on major acquisition

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.

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The world’s most hated company: can NGOs help turn Shell’s reputation around?

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While Shell’s plummeting profits are partially due to the falling price of oil, the years of negative publicity surrounding the company have likely also had an effect…

Alison MoodieSaturday 6 February 2016 14.00 GMT

In mid-2015, Shell realized its project in the Chukchi Sea, off the coast of Alaska, was in trouble. After nearly a decade of expensive drilling, it still hadn’t yielded results and increasingly strict regulations were making it harder to operate. Plus, there was the small issue of public opinion, which, inspired by an aggressive campaign by Greenpeace, was turning against the company. 

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Corporate earthquakes

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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”.

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Shell to cut 10,000 jobs as profits plunge by 80 per cent

Screen Shot 2016-02-05 at 11.00.27Tom Bawden Environment Editor: 5 FEB 2016

Shell yesterday confirmed plans to cut 10,000 jobs now that its takeover of rival BG Group is set to go through, and raised the prospect of further redundancies, as it reported an  80 per cent slump in profits to a 13-year low.

Two days after BP announced its biggest-ever annual loss, Shell revealed that its profits had fallen to $3.8bn (£2.6bn) last year, from $19bn in 2014. The industry has been rocked by a sustained slump in the oil price, from $115 a barrel in the summer of 2014 to $35.41 yesterday. 

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Shell’s Profit Down 56 Percent on Depressed Oil Prices

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Screen Shot 2016-01-14 at 00.11.12Shell’s Profit Down 56 Percent on Depressed Oil Prices

By STANLEY REEDFEB. 4, 2016

LONDON — Royal Dutch Shell became the latest big energy company to file a damage report on the impact of depressed oil prices on Thursday, saying that its adjusted profit fell 56 percent in the fourth quarter of 2015 compared to a year earlier.

Shell said earnings adjusted for inventory changes were $1.8 billion, down sharply from $4.2 billion in the comparable period of 2014.

For 2015, Shell’s earnings fell 80 percent to $3.84 billion, compared to $19 billion in 2014.

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Shell Profits Plunge By 80% Amid Oil Slump

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Shell is pressing ahead with a £36bn ($52bn) merger with exploration group BG. It has said 10,000 jobs will go across the two companies as a result. The deal has been approved by shareholders and will complete later this month.

The industry has been hammered by the collapse in the world energy market which has seen the price of a barrel of Brent crude dive by three-quarters from $115 in the summer of 2014 to around $30 at the start of this year.

Mr van Beurden said Shell was seeing “substantial changes”, slashing costs and investment in response to the slump – and warned that more cuts could come.

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Shell confirms 10,000 job cuts and a steep profits fall

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Royal Dutch Shell has confirmed it is cutting 10,000 jobs amid its steepest fall in annual profits for 13 years.

It made $1.8bn (£1.23bn) for the fourth quarter of the year, compared with a $4.2bn profit for the same period the year before.

Full-year 2015 earnings, excluding identified items, were $10.7bn, compared with $22.6 billion in 2014.

The oil firm indicated it would report a massive drop in profits two weeks ago.

The company reports earnings on a current cost of supplies (CCS) basis.

Last week, shareholders in Shell, which is Europe’s largest oil company, voted in favour of its takeover of smaller rival BG Group.

The company cut back hard on investment.

Its capital spending for the year was slashed to $28.9bn, $8.4bn lower than in 2014.

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For Oil Companies, It’s a Year of Slashing Costs and Jobs

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This year will be another hard one for the oil majors as they cut spending.

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.

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S&P downgrades Shell to A+/A-1; keeps door open to further downgrade

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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.

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S&P cuts Shell’s credit rating amid oil rout

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1 FEBRUARY 2016

Standard & Poor’s sliced Royal Dutch Shell’s credit rating on Monday…

The New York-based ratings company lowered Shell’s rating by one notch to “A+” from “AA-” and said it may make more cuts in the future.

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Shell and BP brace for profit massacre

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THE carnage unleashed by the crash in crude prices will be laid bare this week when Britain’s biggest energy companies unveil plunging profits, billions in write-downs and confirm thousands of job losses.

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Pension funds at risk as BP and Shell’s near £10bn profits slump sparks dividend payouts fears

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By JON REES FOR THE MAIL ON SUNDAY31 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.

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Final approval for Shell mega-merger as BG Group shareholders vote in favour of the £36bn deal

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By LAURA CHESTERS FOR THE DAILY MAIL: 29 JAN 2016

One of the largest takeovers in history finally got the go-ahead yesterday after BG Group shareholders followed those at Royal Dutch Shell in approving the £36billion deal.

At a meeting in London, 99.53 per cent of BG shareholders voted in favour, a day after 83 per cent of Shell investors approved the deal that was first announced last April.

Shell chief executive Ben van Beurden said: ‘BG adds attractive deep water and integrated gas positions and will act as a catalyst for accelerating the reshaping of our business. 

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