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Posts under ‘OPEC’

Shell eyes $700 million exit from Gabon – sources

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By Freya Berry and Ron Bousso

LONDON (Reuters) – Royal Dutch Shell <RDSa.L> is working on selling out of its onshore assets in Gabon, according to two sources familiar with the matter, seeking to refocus its African presence.

Bids are due in June for the fields, which one source estimated could be worth around $700 million (488.55 million pound). However the second person said that price indications were currently below Shell’s expectations and that no sale may occur.

“Shell continuously evaluates opportunities for our global portfolio in line with our business strategy,” a company spokesman said on Thursday.

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Botched Doha deal undermines OPEC credibility, oil prices tumble

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By REUTERSPUBLISHED: 18 April 2016

By Henning Gloystein

SINGAPORE, April 18 (Reuters) – Oil prices tumbled on Monday after a meeting by major exporters in Qatar collapsed without an agreement to freeze output, leaving the credibility of the OPEC producer cartel in tatters and the world awash with unwanted fuel.

Tensions between Saudi Arabia and Iran were blamed for the failure, which revived industry fears that major government-controlled producers will increase their battle for market share by offering ever-steeper discounts.

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Major Oil Exporters Fail to Agree on Production Freeze

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By STANLEY REED and ANDREW E. KRAMERA version of this article appears in print on April 18, 2016, on page B1 of the New York edition

DOHA, Qatar — Officials from 18 oil-producing nations failed on Sunday to reach a deal to freeze oil production at current levels.

The meeting of officials, representing most of the Organization of the Petroleum Exporting Countries as well as Russia, had been intended to calm the markets and convince them that the two leading oil exporters, Russia and Saudi Arabia, were cooperating. But with officials coming up short on Sunday, the meeting may end up being a blow to confidence that could send oil prices tumbling.

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Eyes on Doha

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By Ed Crooks: April 15, 2016

All eyes in the oil market this weekend will be on Sunday’s meeting in Doha, which will bring together leading producers including Russia and most – although perhaps not all – of the members of Opec. Expectations that the countries will agree to freeze production, encouraged this week by statements from Russian and Iraqi representatives, have helped drive Brent crude prices up more than 60 per cent from about $27 per barrel in January to around $44 today.  The heads of some of the world’s largest trading houses have concluded that for oil producers, the worst is probably now over.

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Why I Wouldn’t Touch Royal Dutch Shell Plc & Tullow Oil plc With A Bargepole!

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Screen Shot 2016-03-15 at 10.34.57By The Motley Fool  Apr 8, 2016

Investor appetite for the fossil fuel sector has died down in recent days amid a fresh dip in crude prices.

After moving back above the $40 per barrel marker last month, Brent values have subsequently run out of steam as enduring fears over supply/demand imbalances have come to the fore again.

Oil producers like Shell (LSE: RDSB) and Tullow Oil(LSE: TLW) have been carried higher following Brent’s surge from January’s multi-year lows of $27.67. But with ‘black gold’ back on the defensive, I reckon oil companies big and small are back in danger of a huge share price reversal.

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Sideways moves

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By Ed Crooks: April 1, 2016

Oil prices went sideways all week, with Brent crude edging up above $40 on Thursday.  Hedge funds have made record bets on rising crude prices, but everyone is still watching prospects for the scheduled meeting of Opec and non-Opec oil producers in Doha, Qatar on April 17. Qatar’s oil minister said 12 countries had so far agreed to attend, including most Opec members and Russia. Reuters provided a useful factbox on the countries that could be present at the meeting.  Ecuador is one of the Opec members trying to persuade non-member countries to join in a commitment to freeze production.

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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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Iraq Exports First Natural Gas Shipment in Its History

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By THE ASSOCIATED PRESS: MARCH 20, 2016

BAGHDAD — Iraq on Sunday exported the first shipment of natural gas in its history, a key development for the OPEC member struggling to feed a cash-strapped economy amid an expensive fight against the Islamic State group.

The move revives a long-sought ambition by Iraq to be a gas exporter, thanks to a joint venture with Anglo-Dutch Royal Dutch Shell PLC and Japan’s Mitsubishi Corp. Iraq first planned to begin exporting gas in the late 1970s, but that timeline was delayed by the Iraq-Iran war when Iraqi export ports were bombed.

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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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How Saudi Arabia Turned Its Greatest Weapon on Itself

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By ANDREW SCOTT COOPER: A version of this op-ed appears in print on March 13, 2016

FOR the past half-century, the world economy has been held hostage by just one country: the Kingdom of Saudi Arabia. Vast petroleum reserves and untapped production allowed the kingdom to play an outsize role as swing producer, filling or draining the global system at will.

The 1973-74 oil embargo was the first demonstration that the House of Saud was willing to weaponize the oil markets. In October 1973, a coalition of Arab states led by Saudi Arabia abruptly halted oil shipments in retaliation for America’s support of Israel during the Yom Kippur War. The price of a barrel of oil quickly quadrupled; the resulting shock to the oil-dependent economies of the West led to a sharp rise in the cost of living, mass unemployment and growing social discontent.

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Oil’s upwards rally

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By Ed Crooks: 11 March 2016

Oil this week continued its recent rally, with Brent crude clinging on above $40, but there was speculation that most of the gains of the past two months could be undone if Opec members and Russia failed to finalise their earlier conditional agreement to freeze production.

Reuters reported Opec sources as saying that a suggested meeting in Moscow on March 20 to confirm the deal was unlikely to take place. The critical factor is Iran; other countries say they will not meet to discuss joining the freeze unless Tehran agrees to sign up for it too. President Hassan Rouhani’s chief of staff told a conference in London that his country wanted to increase exports to regain its pre-sanctions market share before it would start talking about cuts. The same official, Mohammad Nahavandian, also sought to reassure international companies that the country would soon unveil new and improved contracts for investors in its oil and gas industry, even though the issue has raised concerns about attempts by foreign businesses to “loot Iran’s natural resources”.

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Another Oil Crash Is Coming, and There May Be No Recovery

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Tom Randall: Bloomberg.com: 24 FEB 2016

It’s time for oil investors to start taking electric cars seriously.

In the next two years, Tesla and Chevy plan to start selling electric cars with a range of more than 200 miles priced in the $30,000 range. Ford is investing billions, Volkswagen is investing billions, and Nissan and BMW are investing billions. Nearly every major carmaker—as well as Apple and Google—is working on the next generation of plug-in cars.

This is a problem for oil markets. OPEC still contends that electric vehicles will make up just 1 percent of global car sales in 2040. Exxon’s forecast is similarly dismissive. 

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OPEC’s Freeze Backfires

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The punchline? The joke’s on OPEC.

There are several glaring problems inherent to the freeze, whereby members of OPEC and other large producers such as Russia are supposed to not raise their oil output from current levels, not least that they are already producing too much oil for the market to absorb.

But there is a more subtle effect that actually works against the likes of Saudi Arabia: The freeze raises hope. In particular, it raises hope in the otherwise largely despondent world of energy financing.

Monday night, before those oil ministers iced the freeze, Cabot Oil & Gas, a U.S. exploration and production company, announced it had sold an upsized offering of new shares that should ultimately raise roughly $1 billion.

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Russia Saudi pact

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By Ed Crooks: February 19, 2016

This week the story of the oil price crash took a genuinely unexpected turn with the conditional agreement from Saudi Arabia and Russia that they would not increase their production, provided other countries made the same commitment. It was the first real co-operation between Opec and non-Opec countries for 15 years, and although its true significance is probably rather less than that makes it sound, the pact nevertheless provided grist for extensive interpretation.

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Opinion: Will oil be so cheap that it won’t pay to pump it out of the ground?

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By Paul Spedding: Published: Feb 9, 2016

The conventional wisdom regarding the recent plunge in the price of oil CLH6, -0.50%   is that we are seeing a repeat of the 1985-1986 collapse, when Saudi Arabia ramped up production as part of a dispute with other members of the Organization of Petroleum Exporting Countries cartel. This time, the thinking goes, Saudi Arabia is doing the same in response to its loss of market share to shale-oil production in the United States.

But there is another parallel that is even more relevant — with important implications for the long-term price of oil. The recent collapse is reminiscent of a similar dive in the price of coal — which crashed from a brief high of $140 a ton in 2008 to about $40 a ton today — which led some deposits to become “financially stranded,” meaning that the cost of developing them outweighs potential returns.

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Royal Dutch Shell: Here’s Why S&P Downgraded Credit Rating

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By Muhammad Ali Khawar on Feb 2, 2016 at 6:49 am EST

Standard & Poor’s (S&P) recently downgraded Royal Dutch Shell’s (ADR) (NYSE:RDS.A) credit rating from “AA-” to “A+,” as a result of the depressed crude environment. Since June 2014, crude oil prices have fallen more than 70%.

The downgrade came just weeks after the S&P lowered Brent crude expectations for the year. Initially, it expected the global crude oil benchmark to trade at around $55 per barrel. However, only last month the firm cut its price forecast to $40 per barrel, when the market conditions failed to recover.

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Why Royal Dutch Shell Plc Shares Could Easily Topple Another 15%!

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By Royston Wild | Fool.co.uk: Friday 29 JAN 2016

Shares in fossil fuel giant Shell (LSE: RDSB) have enjoyed a solid bump higher in recent days following a meaty bounce in the oil price.

Crude values have shot skywards following chatter that an accord could be struck between OPEC and Russia to curtail production. The Brent benchmark has gained $5 since Monday and is now back above $35 per barrel, reaching levels not seen since the start of January.

Shell has subsequently seen its stock price appreciate 7% during the course of the week, adding to chunky gains seen in the prior 7-day period.

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What goes down

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By Ed Crooks: January 29, 2016

The week has been a reminder that oil prices can go up as well as down. By Thursday night, Brent crude was 25 per cent higher than its low point eight days earlier. At a little under $34 per barrel, though, oil is still at a level that makes the great majority of US shale developments uneconomic. As I wrote in the FT on Saturday, it is pointing towards a radical shake-out in the shale industry.

Concerns about the huge financial strain that $30 crude imposes on oil producers and oilfield services companies has driven the value of junk-rated US energy debt down to its lowest level for more than two decades, at an average of just 56 cents on the dollar.  Markets have also become increasingly concerned about the domino effect from weak oil prices hitting other sectors, such as manufacturing. On balance, however, David Sheppard and Neil Hume argued in the FT, cheap oil is still better for the world economy than expensive oil.

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Oil price falls again as Shell shareholders prepare to vote on mega-merger with BG Group

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The price tumbled as much as 3 per cent during trading yesterday when it emerged Iraq had produced a record high of oil and may even raise output further.

The news comes as the market is already braced for more supply from Iran after sanctions were lifted. 

Tankers have begun to leave Iran’s ports and it agreed its first deal with a European company last week with Greece’s refinery Hellenic Petroleum. 

Some analysts expect Iran to increase production to between 3million and 4million barrels a day. Iraq’s fields produced more than 4.1million barrels a day.

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Oil prices in reverse amid Opec call

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Oil prices tumbled again on Monday, eroding last week’s gains, as Opec called for co-operation from oil-producing nations outside the cartel.

Brent crude fell 4.1% to $30.86 a barrel following a 10% rise on Friday, while US oil shed 4.7% to $30.68.

The slide came as the head of Opec called for all oil-producing nations to work together.

Abdullah al-Badri said both Opec and non-Opec oil producers needed to tackle oversupply to help prices rise.

“It is vital the market addresses the issue of the stock overhang. As you can see from previous cycles, once this overhang starts falling then prices start to rise,” he told a conference in London.

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Oil plumbs new lows below $27 as rout persists

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U.S. oil is now flowing unfettered to Europe for the first time, “so it’s a battle royale.”

Markets | Wed Jan 20, 2016: 3:29pm EST: New York

U.S. oil prices crashed below $27 dollars a barrel on Wednesday for the first time since 2003, caught in a broad slump across world financial markets with traders also worried that the crude supply glut could last longer.

Oil has fallen more than 25 percent so far this year, the steepest such slide since the financial crisis, piling more pain on oil drillers and producing nations alike. Yet they keep pumping more oil into an oversupplied market.

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Why Buying BP plc & Royal Dutch Shell Plc Is Utter Madness!

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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.

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Oil price crash means petrol could become cheaper than bottled water

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By Mehreen Khan: 14 Jan 2016

Petrol will soon cost less than bottled water as the relentless decline in oil prices sends fuel down to 86p a litre, it has been claimed.

Brent crude fell to below $30 a barrel for the first time since 2004 on Wednesday evening – and has fallen by more 73pc since reaching highs of $115 last summer.

Motoring group RAC said pump prices now could fall back to levels last seen in the aftermath of the financial crisis in 2009, if the commodity plunges to as low as $10, a forecast made by Standard Chartered bank earlier this week.

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Oil could crash to $10 a barrel, warn investment bank bears

Screen Shot 2016-01-13 at 08.37.51By Mehreen Khan: Telegraph Newspaper: 13 JAN 2016

Oil prices have crashed to below $30-a-barrel amid warnings the rout could reach as low as $10 and bring down petrol prices to levels last seen in 2009.

Standard Chartered became the latest major bank to downgrade its oil outlook to $10, joining the likes of Goldman Sachs, RBS and Morgan Stanley in making ultra-bearish calls as prices have collapsed by 15pc this year.

Brent crude has now slipped to a fresh 12-year low of $30.41 a barrel, while West Texas Intermediate – the US benchmark – is trading at $29.93 – a level last seen in December 2013. Analysts warned the oil market remains fundamentally out of balance as record over-supply and stagnant demand weighs on traders.

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Worst oil bust in 45 years brings US crude below $31 a barrel

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HOUSTON — The oil bust that has cost the United States roughly 70,000 energy jobs has become more severe than any downturn in 45 years, Morgan Stanley said Monday, as crude prices fell a sixth day.

Crude prices tumbled below $32 a barrel on Monday, and over the past 19 months have plunged further and for a longer time than even the 1986 oil bust that deeply bruised the Texas economy. Morgan Stanley says the five major downturns since 1970 no longer can be a credible guide as the oil market enters “uncharted territory.”

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Oil Prices Decline More Than 5 Percent as Stockpiles Increase

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By CLIFFORD KRAUSSA version of this article appears in print on January 7, 2016, on page B2 of the New York edition

HOUSTON — Oil prices plunged again on Wednesday by more than 5 percent as investors paid more attention to signs that global stockpiles are growing than to increasing instability in the Middle East and North Africa.

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.

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Major shareholder sheds BG stake as merger vote looms

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The fund management company cut its holding from 2.2 percent to 0.9 percent and continued offloading shares even after Shell published the deal prospectus, in which the Anglo-Dutch oil major revealed further capex and opex cuts that would boost the merger’s appeal.

Although the mega-merger was announced at a time when oil was pushing multi-year lows, prices have continued sliding since, eroding the immediate financial appeal of the combination.

Shell said last month that it expects the acquisition to break even with Brent crude prices in the low $60s in 2016, while the deal would add to operating cash flow per share at $50 a barrel.

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Royal Dutch Shell: Cheap Oil Makes BG Group Path Slippery

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Ahead of the final vote for the deal, crude oil prices have dropped significantly, presenting one last threat to the merger – by far, the biggest one of all the hurdles it has faced. Further declines in oil prices could be a deal breaker for Shell and BG.

By Mushhood Khan on Dec 28, 2015 at 6:46 am EST

Royal Dutch Shell plc (ADR) (NYSE:RDS.A), one of the largest integrated oil companies in the world, has been in pursuit of UK-based BG Group plc (OTCMKTS:BRGYY) for its valuable LNG assets and its deepwater acreage. Announced in April this year, the $70 billion deal is the biggest of its kind in the energy sector in more than a decade.

Completion of such a grand deal faces several challenges; companies might not be able to meet the conditions of merger, antitrust laws may pose legal hindrances, shareholders might vote against it, or the change in core business conditions might make the deal unviable over the course of time.

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Oil Prices Could Collapse To $20

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By Tyler Durden

Extracts from extracts…

Could oil prices collapse to $20? 

The short answer is ‘yes.’

We believe that crude oil prices could fall further unless global oil production is reduced. As shown in Table 2, we estimate that the global oil market could be oversupplied by roughly 920,000 bpd in 2016. The key assumptions are year-over-year growth in global demand of 1.2 million bpd, Saudi Arabia, Iraq and Libya hold production at current levels, Iran ramps up production at moderate pace over the course of the year and the U.S. rig count remains at current levels.

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Can 2015’s Laggard Royal Dutch Shell Plc Snap Back Next Year?

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I believe that Shell still has much further to fall.

By Royston Wild – Tuesday, 8 December, 2015

It has been a few months in coming, but crude oil prices finally crashed to fresh nadirs at the start of this week. The Brent benchmark toppled all the way back to within a whisker of $41 per barrel, taking out September’s lulls and marking the lowest level since 2008.

The black gold price has endured further pressure after industry cartel OPEC again refused to cut production on Friday, ignoring a steady stream of weak demand indicators and bloated stockpiles. Instead the group elected to intensify its market-share grab by raising its daily production target to 31.5 million barrels.

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Oil producers prepare for prices to halve to $20 a barrel

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Larry Elliott Economics editor: Tuesday 8 Dec 2015 19.40 GMT

The world’s leading oil producers are preparing for the possibility of oil prices halving to $20 a barrel after a second day of financial market turmoil saw a fresh slide in crude…

FULL ARTICLE

OPEC Won’t Cut Drilling, and Prices Plunge 5%

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By CLIFFORD KRAUSSA version of this article appears in print on December 8, 2015, on page B1 of the New York edition

HOUSTON — Crude oil prices slid a further 5 percent on Monday to fall to their lowest levels since the 2009 global recession, pummeled by the fading chance that Saudi Arabia would cut production to halt the commodity’s yearlong slide.

In only 16 months global oil prices have collapsed from over $110 a barrel to less than half that, and the oil industry in the United States and around the world is reeling from its worst crisis since the late 1990s. On Monday, the American benchmark broke the $38-a-barrel mark, a price that makes drilling and completing wells a losing proposition in almost all oil fields around the country.

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Opec keeps pumping, hiking dividend pressure on BP and Shell

OPEC ‘dead’ as oil countries go it alone on price and production

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December 7, 2015

OPEC has abandoned all pretence of acting as a cartel. It’s now every member for itself.

At a chaotic meeting Friday in Vienna that was expected to last four hours but extended to nearly seven, the Organisation of Petroleum Exporting Countries tossed aside the idea of limiting production to control prices. Instead, it went all in for the one-year-old Saudi Arabia-led policy of pumping, pumping, pumping until rivals – external, such as Russian and US shale drillers, as well as internal – are squeezed out of market share.

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As Oil Keeps Falling, Nobody Is Blinking

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By ERIN AILWORTH and BRADLEY OLSON

Dec. 6, 2015 6:56 p.m. ET

The standoff between major global energy producers that has created an oil glut is set to continue next year in full force, as much because of the U.S. as of OPEC.

Exporting Countries on Friday again declined to reduce their near-record production of crude. With no end in sight for the glut, U.S. oil closed on Friday below $40 a barrel for the second time this month.

FULL ARTICLE

Despite Climate Concerns, OPEC Plans to Keep Pumping Oil While It Can

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By STANLEY REED and SARA HAMDANA version of this article appears in print on December 5, 2015, on page B1 of the New York edition

VIENNA — Even as United Nations climate-conference delegates met near Paris on Friday seeking ways to reduce the globe’s dependence on high-carbon fuels like oil, some of the world’s biggest petroleum producers vowed to keep pumping flat out.

The Organization of the Petroleum Exporting Countries said on Friday that it would keep producing oil at current levels, which are estimated to exceed 31 million barrels a day.

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Oil majors BP and Royal Dutch Shell spring a leak after Middle East oil cartel Opec fails to slash production

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By PHILIP WALLER FOR THE DAILY MAIL

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.

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Paralysed Opec pleads for allies as oil price crumbles

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By Ambrose Evans-Pritchard: 04 Dec 2015

The Opec cartel is to continue flooding the world with crude oil despite a chronic glut and the desperate plight of its own members, demanding that Russia, Kazakhstan and other producers join forces before there can be output cuts.

Brent prices tumbled almost $2 a barrel to $42.90 as traders tried to make sense of the fractious Opec gathering in Vienna, which ended with no production target and no guidance on policy. It reeked of paralysis.

Prices are poised to test lows last seen at the depths of the financial crisis in early 2009. The shares of oil companies plummeted in London, and US shale drillers went into freefall on Wall Street.

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Oil Majors Queue in Iran as $30 Billion of Projects in Play

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by Golnar MotevalliAnthony Dipaola and Hashem Kalantari: November 28, 2015: Bloomberg.com

  • Shell, Total, Lukoil interested in specific Iranian fields

  • Iran seeks to sign first oil development deal in March, April

Total SA, Royal Dutch Shell Plc and Lukoil PJSC are among international companies that have selected oil and natural gas deposits to develop in Iran as the holder of the world’s fourth-largest crude reserves presents $30 billion worth of projects to investors.

Total is one of the companies that have been in the forefront of discussions and Eni SpA is also looking to invest, Oil Minister Bijan Namdar Zanganeh said. Shell, Total and Lukoil all specified fields they would be interested in developing in Iran, Ali Kardor, deputy director of investment and financing at National Iranian Oil Co. said in an interview in Tehran.

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How Much Further Do BP plc And Royal Dutch Shell Plc Have To Fall?

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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.

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Questor delivers a damning verdict of the proposed Shell BG merger

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An Opec meeting on December 5 could send oil price even lower and sound the ‘death knell’ for the deal.

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‘If oil prices remain at these deeply depressed levels, then it could bring nothing but disaster. The famous Shell dividend could be cut, investors will be diluted and the shares would become a riskier prospect,’ writes John Ficenec in the Sunday Telegraph

He argues that while the deal makes sense on paper – as it bolsters Shell’s prospects in the dash for gas – the success rests on one factor ‘price’. 

The price here is not right, says Questor, and there is a risk that Shell is overpaying at £47 billion. 

Shell will fund the deal with 30 per cent cash and 70 per cent new Shell shares – that means selling some $30 billion (£19 billion) of assets during the three years from 2016 and a £25 billion share buy-back from 2017 to reverse dilution effects. 

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Questor share tip: Shell should walk away from BG

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The FTSE 100 oil major has endured a turbulent year after announcing its offer for rival BG, says Questor.

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By John Ficenec, Questor Editor: 22 Nov 2015

SHELL’S [LON:RDSB] deal to buy gas group BG makes perfect sense on paper. But if oil prices remain at these deeply depressed levels, then it could bring nothing but disaster.

The famous Shell dividend could be cut, investors will be diluted and the shares would become a riskier prospect.

Deal logic

Shell is suffering from declining reserves and some well publicised exploration failures such as in Alaska. BG has had its problems, but is just about to greatly increase production at one of the largest natural gas fields in the world off the coast of Brazil. There is a dash for gas around the world as governments increasingly shun coal-fired power stations.

In one fell swoop Shell can use its cash and balance sheet strength to return its dwindling reserves to growth, and underpin its dividend payments for the foreseeable future.

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Goldman eyes $20 oil as glut overwhelms storage sites

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By Ambrose Evans-Pritchard: 20 Nov 2015

The world is running out of storage facilities for surging supplies of oil and may soon exhaust tanker space offshore, raising the chances of a violent plunge in crude prices over coming weeks, experts have warned.

Goldman Sachs told clients that the increasing glut of oil on the global market has combined with mild weather from a freak El Nino this winter. The twin-effect could send prices plummeting to $20 a barrel, the so-called ‘cash cost’ that forces drillers to abandon production. “Risks of a sharp leg lower remain elevated,” it said.

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BP and Shell slip up on Crude bottom

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ROYAL Dutch Shell and BP are set to blame the weak oil price for dramatic falls in third-quarter pre-tax profits and revenues, analysts say.

By GEOFF HO: Sun, Oct 25, 2015

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. 

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Why We Believe Shell’s Stock Is Worth $62

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Screen Shot 2015-09-17 at 07.55.40Trefis Team, CONTRIBUTOR: Oct 16, 2015

Royal Dutch Shell Plc. is one of the world’s leading oil & gas companies with operations all across the globe. The company has been hit hard by the current downtrend of low crude oil prices and its average price realizations in both upstream and downstream segments have suffered as a result. Consequently, we believe that Royal Dutch Shell’s Trefis adjusted total revenue for the year 2015 will decline by close to 30% as compared to last year and amount to $337.3 billion (Calculated revenue figures not subjected to any intersegment elimination). However, we believe that a gradual recovery in oil prices in subsequent years will lead to a period of growth in Royal Dutch Shell’s revenues and the company’s revenues will be just shy of $450 billion by the end of our forecast period (2022). Our price target for Royal Dutch Shell stands at $62, implying a premium of more than 10% to the market. In this piece, we try to analyze some of the key drivers we have used in our valuation of Royal Dutch Shell.

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Shell pledges to keep dividend despite slump in oil prices

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If the oil price stays low, Shell’s van Beurden may have to eat his words Photo: AFP

By Andrew Critchlow, Commodities editor: 06 Oct 2015

Royal Dutch Shell has reassured investors that it will maintain its dividends regardless of a prolonged slump in oil prices below $50 per barrel.

Chief executive Ben van Beurden, speaking at the Oil and Money conference in London, said: “Shell is pulling out all the stops to safeguard our dividends and buy-back programme, and to keep our investment programme steady for the future.”

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Shell CEO sees first signs of oil price recovery

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Screen Shot 2015-10-06 at 11.08.41Business News | Tue Oct 6, 2015

Oil markets are beginning to recover but the scale of global oversupply means prices may rise only slowly, the chief executive of Royal Dutch Shell Plc (RDSa.L) said on Tuesday.

“I see the first mixed signs for recovery of oil prices,” Ben van Beurden told an oil industry conference in London.

“But with U.S. shale oil being more resilient than we originally thought and a lot of oil still in stock, it will take some more time to rebalance demand and supply,” he added.

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Premium Times: Former Shell Executive Director Arrested in London on Corruption Allegations Involving Over $20bn

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…former board member of Shell Petroleum Development Company of Nigeria…

By Bassey Udo: 4 Oct 2015

The Nigerian presidency has confirmed the arrest of a former Petroleum Minister, Diezani Alison-Madueke, in London, over allegations of corruption and money laundering.

“The government is aware of the arrest and all the government investigative agencies are working very closely with the British law enforcement,” the Senior Special Assistant to the President, Garba Shehu, told PREMIUM TIMES exclusively on Sunday.

“Nigerian authorities are saying for the first time that matters are being handled with seriousness and deep commitment. Nobody wants to give the impression that this government is frivolous and unserious.

“For this reason, government is only confirming active collaboration. Beyond this, we are not saying more. In due course, Nigerians will be briefed on updates as appropriate.”

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Shell’s Exit From Arctic Oil Drilling

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Screen Shot 2015-08-13 at 11.35.25LETTER TO THE EDITOR OF THE NEW YORK TIMES

“I am hesitant to pop open the Champagne quite yet…”

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To the Editor:

Re “Shell Pulls Plug on Exploration in Alaska Arctic” (front page, Sept. 29):

While the news that Shell has decided to pull out of its controversial Arctic oil exploration effort is cause for celebration for many environmentalists, I am hesitant to pop open the Champagne quite yet.

I find it hard to celebrate knowing that Shell’s withdrawal is the result of an oversaturated oil market fattened on shale oil from the Bakken formation and an OPEC overproduction of 1 million barrels above the cartel’s target output. Shell’s Arctic exit is a business decision in response to low oil prices due to a slowing economy and a glut of supply, both temporary conditions that do nothing to preclude a return to Arctic exploration once these conditions expire.

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