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Shell Prepares For A Different Energy Reality

: 14 August 2017

Summary

  • This summer has seen the governments of several of the world’s major economies propose to eliminate internal combustion engine vehicles over the next 10-30 years.
  • At the same time, Royal Dutch Shell announced several major clean energy investments over the summer in anticipation of a drop-off in petroleum demand.
  • This article looks at how Shell’s clean energy investments fit into its energy profile forecasts compared to its peers. MAIN ARTICLE
  • read more

    More Shell Oil News 12 July 2017

    Royal Dutch Shell: Talking The Talk, But Walking The Walk?: Seeking Alpha: 12 July 2017

    CEO Ben van Beurden reinforces Shell’s readiness to play its part in achieving Paris agreement targets, but execution on this goal unclear. READ MORE

    Oil majors face downgrades if crude prices don’t pick up: S&P: Reuters: 12 July 2017 read more

    Shell News Update Wednesday 7 June 2017

    Shell Must Face ‘Take-Home’ Asbestos Suit, Calif. Court Says: LAW360: 6 June 2017

    A California appeals court has reversed itself and revived a lawsuit against Shell Oil Co. filed by a former employee’s wife who alleges she contracted mesothelioma from exposure to asbestos that accumulated on her husband’s work clothing.

    Norwegian Union Threatens Strike at Statoil, Shell, Eni Platforms: The New York Times: 6 June 2017

    Lederne, the smallest of the three Norwegian unions representing oil industry workers, said the strike would target platforms at Eni’s Goliat, Shell’s Draugen and Statoil’s Kvitebjoern, Oseberg East and Gudrun fields. “We believe it would mean shutting down production on those platforms,” a spokesman for the union said. read more

    Investors want more transparency in Shell’s climate pay policy

    |By: , SA News Editor

    Some investors are pushing Royal Dutch Shell (RDS.A, RDS.B) to explain the finer details of its plan to link executives’ bonus pay to lowering carbon emissions.

    Shell was hailed as a pioneer among the world’s biggest oil companies when it announced the policy to tie 10% of executive bonuses to cutting greenhouse gas emissions, which will be voted on at a May 23 annual general meeting in the Hague, but some investors are pressing Shell to show how it actually will calculate the targets for lowering emissions rather than provide the information retrospectively in its annual report. read more

    SHELL NEWS UPDATE 30 MARCH 2017

    Trump’s climate change executive order won’t change coal’s fortunes, Shell chair says: CNBC

    EXTRACT: President Donald Trump‘s effort to roll back Obama-era climate change policies will not do much to improve demand for coal at America’s power plants, Royal Dutch Shell Chairman Chad Holliday said Thursday.

    FT: Shell’s top oil trader defends North Sea Brent activity: Seeking Alpha

    EXTRACT: Royal Dutch Shell’s (RDS.A, RDS.B) VP of crude oil trading is out with a strong defense against accusations that the company’s activity in the North S
    ea crude market has skewed the benchmark Brent contract that underpins global oil prices.

    Big Oil Vows to Keep Dividends Up as Prices Falter: Bloomberg.com

    EXTRACT: “BP and Royal Dutch Shell have unsustainable dividends,” Neil Woodford, head of investment at Woodford Investment Management Ltd. who manages about $20 billion, wrote in a blog. read more

    Shell News Tuesday 28 March 2017

    Summary

    • The myth of a secure price range for OPEC in its battle against shale.
    • Why OPEC has painted itself into a corner, forcing it to extend lower output.
    • What’s far more important than OPEC and others’ cuts.
    • Cuts or not – low-cost shale producers like Shell will produce at a profit.

    FULL ARTICLE

    More Shell News Friday 24 March 2017

    Geologist for Shell says company hid Nigeria spill dangers: Associated Press

    Royal Dutch Shell’s Nigeria subsidiary “fiercely opposed” environmental testing and is concealing data showing thousands of Nigerians are exposed to health hazards from a stalled cleanup of the worst oil spills in the West African nation’s history, according to a German geologist contracted by the Dutch-British multinational.

    Shell says to start cleaning up 2008 Nigeria oil spills in April: Seeking Alpha

    The head of a group helping organize Royal Dutch Shell’s (RDS.A, RDS.B) clean-up of 2008 oil spills at a Nigerian Delta community says he hopes work can begin next monthShell agreed in 2015 on a £55M ($68.6M) settlement with the Bodo community after accepting liability for two pipeline leaks… read more

    Shell News Stories Friday 24 March 2017

    Shell sells onshore Gabon oil assets to Carlyle for $587 mln: Reuters/Daily Mail

    EXTRACT: For Shell, the deal marks a further step in a $30 billion asset disposal programme to help cut debt after its $54 billion acquisition of BG Group last year. The Anglo-Dutch oil company has sold assets for more than $15 billion since 2016.

    WSJ: Shell report cites “astonishingly high” pollution from Nigerian oil spills: Seeking Alpha

    EXTRACT: Royal Dutch Shell (RDS.A, RDS.B) oil spills that have not been cleaned up for more than eight years have contributed to “astonishingly high” levels of pollution in a Nigerian community, WSJ reports, citing a consultant who helped produce a confidential damage assessment for the company and its partners. The former director of the cleanup project says Shell has denied him permission to publish the study’s results, which dictated a need for health screenings in the Bodo community. read more

    Current Shell News Stories 23 March 2017

    New Boss of Shell Exploration

    Links below to a selection of current news stories posted on our sister website royaldutchshellgroup.com covering, among other developments, news that Shell’s head of exploration Ceri Powell will step down in February and be replaced by Shell upstream strategy VP Marc Gerrits.

    There is also coverage of yet further litigation relating to Shell’s activities in Nigeria. This time a claim against Shell for $406.7 million being brought by the Nigerian Federal Government.

    The news is no better from Canada. According to the Canadian Press, Shell is suffering setbacks with exploration wells off Nova Scotia. read more

    Shell, Total to sign oil deals with Iran

    Dec. 7, 2016 5:48 AM ET| By: Yoel Minkoff, SA News Editor

    Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT) will signinitial agreements today to develop oil and gas fields in Iran, in the first European petroleum deals in the country since sanctions eased earlier this year.

    But the plans open both companies to potential risks from the incoming Trump administration.

    Though Total is French and Shell is jointly headquartered in London and The Hague, both companies have substantial American operations. read more

    FT: Western oil companies reach $5B deal with Nigeria

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    Nov. 8, 2016 10:23 AM ET|By: Carl Surran, SA News Editor

    Nigeria’s government has reached an outline settlement to resolve a dispute with western energy firms that would pay the companies $5B to cover exploration and production joint venture costs in the country, Financial Times reports.

    Nigeria’s petroleum minister tells FT that Royal Dutch Shell (RDS.A, RDS.B), ExxonMobil (NYSE:XOM), Eni (NYSE:E), Chevron (NYSE:CVX) and Total (NYSE:TOT) accepted the settlement of costs incurred during 2010-15, and hopes a deal can be finalized by year-end. read more

    Royal Dutch Shell: The Comeback Is Here

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    Alpha Investor: Sunday Nov 6, 2016

    Summary

    • Shell posted a massive turnaround in its bottom line last quarter on the back of an improved production profile, lower costs, and higher price realizations.
    • Shell’s financial improvement is set to continue going forward as upstream oil price realizations will continue to improve on the back of a positive demand-supply environment in the oil industry.
    • Oil demand has exceeded supply by 500,000 bpd this year and the trend will continue as the likes of Russia, Saudi Arabia, and the U.S. continue to reduce output.
    • Shell’s focus on lowering both operating and capital costs will allow it to attain break-even point even if oil prices remain at $50/barrel, which will also improve cash flow.

    On Tuesday last week, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) reported impressive results for the third quarter. In fact, Shell was able to achieve a major turnaround in its bottom line performance, posting a profit of $1.4 billion as compared to a huge loss of $6.1 billion in the same quarter last year. This impressive turnaround in Shell’s bottom line was a result of an increase in production as compared to the prior-year period, driven by the acquisition of BG that led to a favorable production mix in the upstream segment. read more

    Royal Dutch Shell’s Realistic View On Oil Shows Why It Is The Best Oil Major

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    screen-shot-2016-10-20-at-23-00-27Nov. 4, 2016 4:19 AM ET

    Summary

    • Royal Dutch Shell CFO Simon Henry just forecast that global demand for oil could peak within the next 5 to 15 years and then decline.
    • This is surprising coming from an oil company executive, and runs counter to typical industry projections such as ExxonMobil’s that demand will grow 20% by 2040.
    • Shell will shift their focus to natural gas, biofuels, and hydrogen, in order to be “the energy major of the 2050s”.
    • I like Shell’s perspective a lot: It gives them multiple paths to success. Of course they will still be just fine if oil demand does keep growing.
    • But if Shell is right, they will be ready and their management decisions over the next 5 to 15 years will be two steps ahead of everyone else’s.

    On its earnings conference call this week, Royal Dutch Shell (NYSE: RDS.A) (NYSE: RDS.B) made a suprising commentary on its perspective for the global oil market over the next two decades: Its CFO Simon Henry forecast that global demand for oil could peak within the next 5 to 15 years and then decline.

    Such an apparently pessimistic and bearish forecast is not what you usually expect to hear from a major oil company executive, to say the least. As the article pointed out, ExxonMobil’s (NYSE:XOM) annual outlook makes a more typical projection for the industry: about a 20% increase in global oil demand from 2014 to 2040. read more

    Shell swings to a profit, outlook uncertain

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    screen-shot-2016-10-20-at-23-00-27Nov. 1, 2016 4:30 AM ET|By: Yoel Minkoff, SA News Editor

    “Shell delivered better results this quarter… but lower oil prices continue to be a significant challenge across the business, and the outlook remains uncertain,” Chief Executive Ben van Beurden said in a statement.

    Earnings on a current cost of supplies basis reached $1.4B in Q3, after contracting $6.1B in the same period a year ago, as higher production from acquisition BG Group and lower operating costs helped support earnings. read more

    Royal Dutch Shell – Additional Divestments In Order To Sustain The Dividend

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    Oct. 21, 2016 10:17 AM ET

    Summary

    • Shell is announcing further divestments, this time selling part of its shale operations in Canada.
    • These moves do little to address the giant debt load, although they allow for cash flow neutrality this year.
    • Asset sales, resulting in smaller operations, combined with shareholder dilution hurt the long term potential as management stubbornly tries to preserve the dividend.

    Royal Dutch Shell (RDS.A) announced another round of divestments in order to keep leverage under control, even as oil prices have rebounded a bit in recent times. These modest divestments are countercyclical and hurt production quite a bit in relation to the proceeds. At best cash outflows come to a standstill this year following these moves, although they result in a smaller business going forward, while investors see dilution of the shareholder base in order to sustain the unsustainable dividend. read more

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