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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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Buhari urged to stop work on Egina FPSO

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

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

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Top Shell Oil Trader Stany Schrans Said to Leave Company

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Screen Shot 2016-03-15 at 10.34.57By Laura Hurst and Javier BlasApril 7, 2016. Bloomberg.com

The head of European oil trading at Royal Dutch Shell Plc will leave the company later this year, a significant departure as the company is one of the biggest traders in benchmark Brent crude.

Stany Schrans has worked for more than 15 years at the company, mostly focused on trading North Sea oil, according to four people familiar with the matter who asked not to be identified because the information isn’t public. Tarek al Hassan, a senior Shell trader based in Singapore, is relocating to London to replace him, two of the people said. Shell spokesman Jonathan French declined to comment.

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Time to End ‘Blood Oil’ Disaster in the Niger Delta

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By Richard SteinerProfessor and conservation biologist, Oasis Earth (www.oasis-earth.com): 10 MARCH 2016

The Niger Delta’s legendary “blood oil” disaster has persisted for decades, and is now deepening. Oil in the Delta fuels a dangerous mix of environmental devastation, a violent militancy that has killed thousands, human rights abuses, corporate greed and exploitation, epidemic corruption, massive oil theft, sabotage, repression, poverty, anger and despair. It is time to put an end to this ongoing atrocity, once and for all.

The 30,000 square mile Niger Delta — including rich coastal waters, islands, mangroves swamps, and rainforests — was once one of the most productive and diverse ecological habitats on Earth. But today, after 60 years of oil extraction, the region’s environment and society are devastated — a textbook example of the “oil curse.

The Delta is arguably the most severely oil-damaged environment anywhere in the world. A decade ago, our team of scientists conducting an oil damage assessment in the Delta estimated that each year, some 250,000 barrels (10 million gallons) of oil spill there, an amount comparable to that of the 1989 Exxon Valdez spill in Alaska — each year for 50 years. Oil operations have also caused extensive habitat degradation from road building, forest clearing, dredging and filling, thousands miles of pipelines, and chronic pollution from gas flaring and drilling wastes.

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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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Bulgaria signs deal with Shell for deepwater oil and gas exploration

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Screen Shot 2016-02-17 at 08.47.47Markets | Tuesday Feb 23, 2016 

Bulgaria sealed a deal with Royal Dutch Shell on Tuesday to explore for oil and gas in an offshore block in the Black Sea in a bid to end its almost total dependence on Russian natural gas.

Shell won a tender for a five-year permit for deepwater exploration at the 1-14 Silistar block that covers 7,000 square km in September and pledged to invest 18.6 million euros ($20.5 million) in seismic surveys.

“The licence that we have been awarded today allows us to evaluate the potential for oil and gas in offshore Bulgaria. This process can be quite a long process and with much uncertainty,” said Eileen Wilkinson, regional director at Shell International Exploration and Production, after the signing.

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Shell leapfrogs Total as UK’s biggest producer after BG merger

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Written by Mark Lammey – 16/02/2016

Shell leapfrogged Total to become the UK’s biggest net oil and gas producer after completing its £47billion takeover of BG Group.

The “mega-merger” was approved by shareholders from both companies last month and went through yesterday.

It creates a firm with a net output of 200,000 barrels of oil equivalent (boe) per day in the UK alone.

A company’s net, or equity output is the amount it produces based on the size of its share in an oil or gas field.

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Shell expects its Brazil output to quadruple by 2020: CEO

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RIO DE JANEIRO | BY JEB BLOUNT AND MARTA NOGUEIRA: Mon Feb 15, 2016

Royal Dutch Shell (RDSa.L), Europe’s largest oil company, expects to make robust investments in Brazil’s offshore resources, hoping to quadruple oil and gas output there by the end of the decade, its chief executive officer said on Monday.

CEO Ben van Beurden spoke in Brazil shortly after Shell’s $52 billion takeover of BG Group Plc BG.L, approved in late January, took effect.

Thanks to BG’s large portfolio of assets in Brazil and Shell’s decision to buy 20 percent of the giant Libra offshore project in 2013, Brazil will be a key area for the Anglo-Dutch company as it focuses on liquefied natural gas and deepwater oil production, van Beurden said.

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Oil majors’ business model under increasing pressure

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Ed Crooks in New York and Chris Adams in London: 14 FEB 2016

Gorgon, a massive liquefied natural gas project off the north-west coast of Australia, is one of the wonders of the modern age. Its $54bn price tag makes it — in nominal terms at least — one of the most expensive engineering projects ever completed. It could also be a monument to a fading era, the last hurrah of Big Oil. In this view of the world, the price crash has been like an asteroid strike: agile shale producers can survive, but the lumbering dinosaurs of big oil are doomed.

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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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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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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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Oil Rout Prompts Moody’s to Consider Shell, Total for Downgrade

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Screen Shot 2016-01-22 at 12.08.33Moody’s will also review the ratings of two U.S. refining joint ventures linked to Shell, Motiva Enterprises LLC and Deer Park Refining LP.

By Mikael Holter and Rakteem Katakey: Bloomberg.com: 22 JAN 2016

Royal Dutch Shell Plc, Total SA and Statoil ASA, three of Europe’s biggest oil producers, were among more than 100 energy companies whose credit ratings were placed on review for possible downgrade by Moody’s Investors Service.

The reviews come after the rating company cut its oil-price forecasts and should for the most part be completed this quarter, Moody’s said in a statement on Friday. Prices may recover more slowly than companies expect and there is a risk they may fall further, it said.

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Shell attacked for its part in ‘extraordinary’ £2.3bn Nigerian tax break

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Mark Leftly: 20 JAN 2016

Royal Dutch Shell has come under fire for being part of a consortium that accepted an “extraordinary” $3.3bn (£2.3bn) tax break in Nigeria – twice the poverty-stricken country’s annual health budget.  

In a new report ActionAid estimated the consortium, which also includes France’s Total and Italy’s Eni, received this benefit between 2004 and 2012 on top of Nigeria’s standard five-year tax holiday to encourage investment. The charity says the cost of the tax breaks could have been better spent on improving health and education systems at the same pace that oil revenue pours in.

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Oil Giants Start Losing Safety Net as Refining Margins Squeezed

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Rakteem Katakey and Firat Kayakiran: Bloomberg.com: 19 JAN 2016

Refining profits that buttressed earnings for Exxon Mobil Corp. and Royal Dutch Shell Plc as crude prices plunged are now slumping, further pressuring all of the world’s biggest oil companies as they move into 2016.

Global refining margins, the estimated profit from turning oil into gasoline and diesel, fell 34 percent in the fourth quarter, the steepest decline in eight years, to $13.20 a barrel, data on BP Plc’s website show. Every $1 drop cuts BP’s pretax adjusted earnings by $500 million a year, according to its website.

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Shell’s Earnings to Show Depth of Rout as Oil Extends Losses

Screen Shot 2016-01-18 at 14.27.35Shell will on Wednesday become the first major oil producer to announce annual earnings as it enters the final stages of its plan to buy BG Group Plc in the industry’s biggest deal in years. Investors will scrutinize those preliminary numbers for signs Europe’s largest oil company is doing enough to justify the acquisition as crude drops below $30 a barrel. 

Shell has cut thousands of jobs and reduced spending as Chief Executive Officer Ben Van Beurden prepares the company for a prolonged downturn while looking to BG to add production and cash flow. The 18-month slump in crude, the longest since the mid-1980s, has delayed $380 billion of investments in the industry, driven down profits and erased more than $2.7 trillion of oil companies’ market value.

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Shell denies Iranian report of Tehran visit

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Jan 16 2016

Royal Dutch Shell on Saturday denied a report in Iranian media that it had sent representatives to Iran ahead of the expected lifting of international sanctions.

Iran’s Mehr news agency had earlier reported that Shell and French oil major Total had sent executives to Tehran, and were due to meet officials from the National Iranian Oil Company (NIOC) and National Iranian Tanker Company (NITC) on Sunday.

International sanctions on Iran were expected to be lifted on Saturday under the terms of a nuclear deal agreed last year, and Iran freed four U.S. prisoners. Iran has pledged to ramp up its oil production shortly after sanctions are lifted.

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Shell, Total representatives arrive in Tehran

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Shell, Total representatives arrive in Tehran

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TEHRAN, Jan. 16 (MNA) – Representatives of several world’s oil giants have traveled to Iran on the verge of the removal of international sanctions.

A few days before the cancellation of international sanctions against Iran, a number of the largest oil companies including the Anglo-Dutch Royal Dutch Shell company and France’s Total Corporation have sent representatives to Iran in order to negotiation with Iranian oil authorities.

Accordingly, the visiting representatives are scheduled to hold talks with the officials of National Iranian Oil Company (NIOC) as well as National Iranian Tanker Company (NITC) on Sunday discussing venues for boosting bilateral ties.

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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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Shell Has Underperformed, But It Could Be The Only Oil Major That Emerges Bigger From The Downturn

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Screen Shot 2015-11-20 at 08.55.47…the company’s profits plummeted 70% from last year to $1.77 billion…

Sarfaraz A. Khan: Sunday, Dec 6, 2015

Summary

  • The oil major Royal Dutch Shell is closing in on its biggest-ever merger with the UK based oil and gas producer BG Group.
  • Shell has been the worst performing stock in its peer group and now offers an above average yield of 7.8%.
  • But Shell is generating enough cash from operations and asset sales to cover its spending.
  • More importantly, Shell could be the only oil major that emerges even bigger from the downturn.

The oil major Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) is closing in on its biggest ever merger with the UK based oil and gas producer BG Group (OTCQX:BRGYY). On Wednesday, the Anglo-Dutch oil producer revealed that it has received a green signal from Australia’s Foreign Investment Review Board following an approval from the country’s anti-trust regulator received last month. The BG Group is one of the major players in Australia’s rising LNG sector where the company has invested more than $20 billion on developing the Queensland Curtis LNG plant.

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BP plc, Royal Dutch Shell and Others up in Arms against Coal

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By Micheal Kaufman on Dec 2, 2015

Environmentalists are winning the race against energy companies, as the world tries to adopt environmental-friendlier ways of energy generation. World leaders from over 19 countries and prominent personalities such as Bill Gates and Mark Zuckerberg are at the UN Climate Summit in Paris, which has been ongoing from November 30 and will continue until December 11.

Energy Companies Coming in Front

The growing concern over global warming and rising temperatures has lined up global energy companies such as Royal Dutch Shell, BP plc. (ADR) (NYSE:BP) and Total SA (ADR) (NYSE:TOT). These companies have recently teamed up to support climate change and asked authorities to consider a carbon tax.

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EU Directive: safety of offshore oil and gas operations

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DIRECTIVE 2013/30/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 June 2013 on safety of offshore oil and gas operations and amending Directive 2004/35/EC

The above EU Directive (available in many languages, including Dutch) may be of assistance to people around the world who are concerned about the operations of European oil companies. 

A link to the directive is provided at the foot of this article.

The EU directive requires European companies involved in the oil industry to comply with the contents of the directive itself, and their own internal policies and standards globally (SEMS). Oil companies do not publish their own internal policies and standards, which they consider to be confidential. However, most court cases are actually the result of Shell’s employees ignoring the SEMS standards, so this is most helpful if copies of the relevant standards can be obtained through discovery or other means. The SEMS standards are required to be in place for the companies to operate in Europe. 

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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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Shell Oil Co. president touts carbon tax over piecemeal regulations

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Marvin Odum Shell Oil

Marvin Odum President Shell Oil Co

Posted on November 10, 2015 | By Jordan Blum

A carbon tax or cap-and-trade system in the U.S. — and globally — would serve the energy industry better than the current slate of piecemeal state and federal regulations, Shell Oil Co. President Marvin Odum  said Tuesday.

He acknowledged that Congress won’t take action soon in gridlocked Washington, but said that people should move beyond sound bites. Odum spoke at University of Houston’s energy symposium focusing on whether now is the right time for a carbon tax.

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Big Oil Gears Up For $60 Break-even Price As Profits Sink

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Gaurav SharmaOCT 31, 2015

The latest quarterly results season is receding into the accounting archives, with BP, Royal Dutch Shell, Chevron and the keenly anticipated numbers of Exxon Mobil now with us.

That lower oil prices continue to dent profits at the world’s biggest oil companies is no longer news. Figures on their often unloved downstream operations performing well bring a few smiles and keep detractors of the integrated model quieter than usual.

Take big beast Exxon, which reported quarterly profits of $4.24bn, down 47% on an annualized basis from the same quarter last year. Its profits from refining doubled to about $2bn, but upstream takings fell 79% to $1.4bn. Prior to Exxon, smaller rivals (e.g. – BP, Shell and Chevron) had all posted declines in headline quarterly profits earlier in the week. Yet read between the lines of the profit declines, and a common message on how to cope seems to be emerging.

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Big Oil Is a Buy as Cutbacks Pave Way for Recovery

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Screen Shot 2015-09-17 at 07.55.40by Rakteem Katakey and Angelina Rascouet: Oct 20, 2015

  • Shell has highest percentage of buy ratings in three years
  • Third-quarter earnings seen marking low point before rebound

Energy companies are finally starting to come back into favor.

After enduring the longest oil-price collapse in more than a decade, crashing profits and an investor exodus, Europe’s biggest producers are regaining fans as analysts bet earnings bottomed last quarter and will now start to recover.

While Total SA, the region’s second-biggest oil company, will probably post the worst quarterly performance since 2009, it also has the highest proportion of buy ratings in a year, according to analysts surveyed by Bloomberg. Despite similarly bleak forecasts, Royal Dutch Shell Plc, Europe’s No. 1, has the biggest share of buy recommendations since mid-2012 while BP Plc has the most since February.

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Big Oil’s Murky Climate

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Big Oil truly is facing a conundrum of biblical proportions

Liam Denning: Bloomberg.com: October 16, 2015

Big Oil is getting religion — sort of.

Ten major oil companies including Royal Dutch Shell, BP and Saudi Aramco declared on Friday that they totally get the climate change thing and would support measures aimed at preventing it. 

Yet, without committing to the most obvious measure to encourage fundamental change — namely, widespread carbon pricing — you could say the Oil and Gas Climate Initiative has taken a leaf from St. Augustine: yearning to be pure, just not quite yet.

The announcement comes ahead of December’s UN climate conference in Paris and not long after a more modern cleric, Pope Francis, took his call for greater efforts to curb carbon emissions directly to Congress.

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BP plc, Royal Dutch Shell And Others Declare Joint Action On Climate Change

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Screen Shot 2015-10-16 at 22.05.20By: Micheal Kaufman: Oct 16, 2015 

Global warming over the past few years has become a major issue. Companies around the world keep on pumping and burning record levels of conventional fossil fuels. Burning of fossil fuels leads to carbon emissions, which are highly detrimental for the environment. Activists have now have taken a stern hand regarding pollution and are urging companies to adopt safer cleaner fuels. President Barack Obama recently also stressed upon the importance of using alternatives, such as natural gas, which are safer for the environment.

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Shell Starts Nigeria Offshore Expansion of Up to 50,000 Barrels

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Screen Shot 2015-09-25 at 22.48.19Rakteem Katakey: Bloomberg.com: 5 Oct 2015

  • Bonga phase 3 oil passes through floating production facility
  • Shell has 55% of Bonga, Exxon 20%, Total, Agip 12.5% each

Royal Dutch Shell Plc expanded oil production off Nigeria’s coast by starting the third phase of its Bonga field. 

That phase has a peak production capacity of about 50,000 barrels of oil equivalent, Shell said Monday in an e-mailed statement. The floating production and storage facility serving Bonga’s third phase has a capacity of more than 200,000 barrels of oil and 150 million standard cubic feet of natural gas a day.

Shell has a 55 percent stake in Bonga and operates what it says were the first deposits to be developed in Nigeria’s deep waters in 2005. Exxon Mobil Corp. holds 20 percent, while units of Total SA and Agip, a subsidiary of Italy’s Eni SpA, each own 12.5 percent.

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Here’s How Royal Dutch Shell plc And BP plc Will Be Impacted By A Weak Chinese Economy

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Bidness Etc discusses how European oil majors are impacted by the slowdown in the Chinese economy

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By: Micheal KaufmanSep 25, 2015

The slowing Chinese economy has impacted the overall world economy and various other sectors. According to a Moody’s Investor service report EMEA (Europe, Middle East, and Africa)’s mining sector is totally exposed to the economic crisis, followed by the oil and gas sector. Shipping, chemicals, and auto sector are considerably impacted while some other EMEA sectors including tobacco, telecoms, real estate, healthcare, and railways will be marginally impacted, since they are more regionally focused and their credit worthiness is not genuinely exposed.

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Iran to allow construction of 100 Total and Shell gas stations

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18 Sept 2015

Total and Shell have been given the green light to build 100 gas stations across Iran in the near future, after approval by government officials. This will be the first time foreign branded gas stations will operate in the country.

The 100 gas stations, which also received the approval from Bijan Haj Mohammad Reza, the chairman of the trade union of Iran’s filling station, will spread across different Iranian regions, according to Iranian news website Oilnews.

“For the first time Iran’s Petroleum Ministry will give permission for the construction of gasoline stations under any brand in the country,” he said.

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How to Invest in Arctic Developments After Obama’s Alaska Trip

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Arctic developments have great potential, but are they worth the risks?

By Debbie CarlsonSept. 7, 2015

As climate change melts some of the Arctic’s permafrost, natural resource companies and shippers are eyeing the potential to develop a region that is receiving renewed public attention from President Barack Obama’s trip to Alaska.

According to global management consulting firm A.T. Kearney’s Global Business Policy Council, worldwide investment in the region could reach $100 billion over the next decade. The Northwest Passage and Northern Sea Route could potentially decrease travel times between the U.S., Europe and Asia by 40 percent, while the value of hydrocarbon deposits – crude oil and natural gas – located in the U.S. Arctic alone could exceed $1 trillion. The region is also home to rich metal deposits.

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Exxon Mobil Corporation, Chevron Corporation, BP And Royal Dutch Shell Face Challenging Dividend Environment

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Bidness Etc sheds light on the challenges for companies like Exxon, Chevron, BP, Royal Dutch Shell, and Total SA in sustaining dividend payouts amidst depressed crude oil prices

By: MICHEAL KAUFMANSep 1, 2015 

Crude prices have dropped more than 50% since the highs of June last year, following weak Chinese demand and a global supply glut. Oil companies are already feeling the heat and it will be a challenge for them to maintain dividends in the current scenario.

What is more, the past week saw further deterioration in the market, and the West Texas Intermediate (WTI) plunged into the high 30s following the devaluation of the Chinese yuan. Monday, August 24 saw a global market sell-off and almost all major indexes declined.

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Market Rout

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Oil’s slump has been brutal. More than half a trillion dollars of value has been wiped from the five biggest international oil companies — Exxon, Shell, Chevron, Total and BP — since mid-June last year.

Rakteem Katakey: August 26, 2015: BLOOMBERG.COM

Shares of the largest oil companies have slumped so low it suggests investors expect the crash in crude prices to force cuts in dividends. History tells a different story.

Oil’s collapse has driven the annual dividend yield at Royal Dutch Shell Plc to at least a 20-year high of 7.7 percent this week, compared with 4.4 percent for the benchmark FTSE 100 Index. The yield — the annual return divided by the share price — is also at a two-decade high at Exxon Mobil Corp. and Chevron Corp.

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Chevron Corporation, Royal Dutch Shell Plc & Other Oil Co.s Have Lost $1.3 Trillion Since Last Year

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By: MICHEAL KAUFMAN: Aug 5, 2015

As the global benchmark of crude, Brent currently hovers around $50 per barrel. Meanwhile, the oil and gas industry has lost $1.30 trillion of its value this year, and this eroded value equals the annual gross domestic product (GDP) of Mexico. The combined market capitalization of 157 listed oil and exploration and production (E&P) companies in North America has dropped from $3.80 trillion last June to around $2.50 trillion this July, marking a decline of 34.20%.

The crude prices have dropped more than 50% since last June, as they fell from $114 to around $50. The declining oil prices have forced oil companies, including Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Total SA (ADR) (NYSE:TOT), and BP plc (ADR) (NYSE:BP) to cut their spending, as BP has started testing projects that will give it a profit of $60 per barrel. Total keeps the price outlook at $70, while Shell keeps it at between $70-110.

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Shell’s Dividend Pledge: Solid Or Empty Promise?

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One cannot but admire CEO Ben van Beurden for his courage…

August 4, 2015

Summary

  • Royal Dutch Shell is dead serious about protecting future dividend payments. CEO Van Beurden committed himself to paying attractive dividends in the next two years.
  • Although I am impressed by Shell’s massive cost reduction plans and the slash in investments, I believe the dividends are still not fully covered by future cash flows.
  • However, Shell’s strong balance sheet and the expected sale of non-core assets provide ample room for the company to keep distributing juicy dividends in the (near) future.

One cannot but admire CEO Ben van Beurden for his courage. Amidst the biggest oil crisis since the early seventies, the CEO is very clear about Shell’s (RDS.A, RDS.B) dividend intentions.

In a short clip on the company’s website, Van Beurden states that Shell is “committed to its dividend policy.” In an interview with Bloomberg, the CEO even calls dividends an “iconic aspect in Shell’s proposition to investors.”

Those are not just empty words. To my knowledge, the company did something that it has never done before: given a strong guidance for the next seven quarterly dividend payments. Despite the “challenging market conditions,” Shell intends to pay a total dividend of $1.88 per share this year ($3.76 per share for the ADR). The company even expects to distribute at least $1.88 per share next year.

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Shell to Strengthen Russian Hand Through Gazprom Asset Swap

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Screen Shot 2015-06-18 at 22.09.48by Rakteem Katakey: August 3, 2015: BLOOMBERG.COM

Royal Dutch Shell Plc will swap a stake in one of its international energy assets for part of Gazprom PJSC’s Sakhalin-3 project as Europe’s biggest oil company extends ties with Russia.

The companies are discussing which asset would be offered to Gazprom, Shell Chief Executive Officer Ben Van Beurden said last week in London. For Shell, the prize is greater involvement in the world’s biggest gas reserves.

“Russia sits on 25 percent of the world’s gas reserves and is very, very close to markets that we are very familiar with,” Van Beurden said July 30, on the sidelines of the company’s earnings presentation. Shell is also pushing “to see how we can work with Gazprom internationally.”

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Shell to Cut 6,500 Jobs, Reduce Investment by $7 Billion

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By Rakteem Katakey: July 30, 2015″ BLOOMBERG.COM

Screen Shot 2015-07-30 at 08.23.47Royal Dutch Shell Plc, the oil producer buying BG Group Plc for more than $70 billion, said it plans to cut 6,500 jobs this year and reduce capital investment by $7 billion.

Shell is planning for a “prolonged downturn,” the company said Thursday in a statement. Its dividend commitment will remain unchanged at $1.88 per share this year, with at least that amount paid in 2016, the company said.

Second-quarter profit adjusted for one-time items and inventory changes dropped to $3.8 billion from $6.1 billion a year earlier, The Hague-based Shell said. That beat the $3.4 billion average estimate of 16 analysts surveyed by Bloomberg.

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Big oil to sharpen focus on costs after $200bn of cuts

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Screen Shot 2015-07-27 at 08.40.27Europe’s biggest oil companies have to find deeper cuts as oil prices expected to weigh on earnings

By Andrew Critchlow, Commodities editor: 27 July 2015

Three of Europe’s biggest oil companies will report weaker earnings this week and the City is looking for guidance on how to mitigate a sustained slump in Brent crude prices beyond the cost cuts already in motion.

In a market defined by oil prices 60pc lower than they were a year ago, energy giants are running out of options to protect their bottom line and all-important progressive dividends.

The brakes have already been put on 45 oil and gas development projects worth $200bn (£129bn) since prices started to fall towards the end of last year, according to a new report from Edinburgh-based consultancy Wood Mackenzie. Combined, these projects account for around 20bn barrels of reserves. The danger is that international oil companies will reveal this week that even deeper cuts are planned, tipping the industry into a form of atrophy.

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Shell Executives Visit Tehran for Projects If Sanctions End

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by Javier Blas 24 June 2015

Royal Dutch Shell Plc executives have visited Tehran to discuss possible partnerships, the latest sign that the largest oil companies are serious about returning to Iran once a deal on the country’s nuclear program is done.

The meeting with Iranian officials covered its outstanding debt to National Iranian Oil Co. and possible areas of business cooperation, the company said in an e-mailed statement Wednesday. Shell owed $2.16 billion as of the end of 2014 for oil it wasn’t able to pay Iran for because of sanctions, according to its annual report.

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How the European Oil Industry Decided to Save the Climate

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By Javier Blas: June 23, 2015

By the time the convention chat turned into action, Royal Dutch Shell Plc, BP Plc, Total SA, Eni SpA, Statoil ASA and BG Group Plc published an unprecedented open letter on climate change. Breaking with their biggest U.S. competitors, they announced their support for efforts to put a cost on polluting, acknowledging they were on the wrong side of history.

“They have massively changed the rhetorical position,” says Charlie Kronick, senior climate adviser at Greenpeace in London. “They know that if you are not at the table, you could end up being lunch.

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Iran Welcomes Shell, BP, Total and American Oil Companies

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Screen Shot 2015-06-11 at 19.31.15Iran Welcomes Shell, BP, Total and American Oil Companies

Dr. Majid Rafizadeh Become a fanPresident of the International American Council: 14 June 2015

“Royal Dutch Shell PLC, which owes the Islamic Republic an outstanding debt of more than $2 billion, has been talking about repaying Iran after the nuclear deal is signed, and consequently the related sanctions are lifted.”

In an unprecedented move, Iranian leaders have welcomed American oil companies to enter Iran, upon the condition that sanctions are lifted. This move suggests that the Islamic Republic is putting its economic interests ahead of its revolutionary ideological interests. In return, the economic profits will definitely help Iran spread its revolutionary ideologies and principles in the region.

Recently, Iranian Oil Minister Bijan Zanganeh stated to Iran’s media “We welcome the presence of American oil companies in Iran,” adding, “we will definitely prepare the grounds for the presence of American oil companies in Iran.”

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Nigerian auditors find NNPC failed to remit $11.6 bil in LNG export revenue

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Nigerian auditors find NNPC failed to remit $11.6 bil in LNG export revenue

NNPC holds 49% equity in NLNG on behalf of the Nigerian government, with partners Shell (25.6%), Total (15%) and ENI (10.4%.)

11 June 2015

State-owned Nigerian National Petroleum Corporation has not remitted $11.6 billion in dividends and loan and interest repayments earned from exports from the Bonny LNG plant from 1999-2012, the country’s oil industry auditors said late Tuesday.

NNPC could not immediately be reached for comment Wednesday.

The Nigerian Extractive Industry Transparency Initiative, or NEITI, said in a statement that the earnings represent NNPC’s share of 49% equity ownership in Nigeria LNG Ltd., owner of the six-train, 22 million mt/year Bonny LNG plant.

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Shell, BP Openly Admit Iran Interest on Possible Atomic Deal

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Article by Javier Blas and Angelina Rascouet published 3 June 2015  by Bloomberg.com

European oil majors are for the first time openly declaring interest in Iran in anticipation of a possible end to sanctions against the country over its nuclear program.

Leaders of Royal Dutch Shell Plc, BP Plc and Total SA all said Wednesday they were ready to return to the nation with the world’s second-largest natural-gas reserves and fourth-biggest oil cache, after similar comments by Italy’s Eni SpA last month.

U.S. oil companies, constrained by the history of American sanctions against Iran dating from the 1979 Islamic revolution, are more cautious in their statements on a return. The current curbs have prevented investment in Iran for a decade.

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Big Oil’s Plan to Become Big Gas

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Article by Rakteem Katakey published 2 June 2015 by Bloomberg.com

Screen Shot 2015-05-22 at 21.49.34Shell CEO Ben Van Beurden…. said his company has changed from “an oil-and-gas company to a gas-and-oil company.”

Oil companies that have pumped trillions of barrels of crude from the ground are now saying the future is in their other main product: natural gas, a fuel they’re promoting as the logical successor to coal.

With almost 200 nations set to hammer out a binding pact on carbon emissions in December, fossil-fuel companies led by Royal Dutch Shell Plc and Total SA say they’re refocusing on gas as a cleaner alternative to the cheap coal that now dominates electricity generation worldwide.

That’s sparked a war of words between the two industries and raised concern that Big Oil is more interested in grabbing market share then fighting global warming.

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European Big Oil Opens Schism on Climate With U.S. Rivals

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Article by Tara Patel and Javier Blas published 1 June 2015 by Bloomberg.com 

The heads of Europe’s largest oil and gas companies joined together for the first time to call for governments to agree on carbon pricing at a United Nations climate summit, opening a schism with their American rivals.

“It’s clear that the subject isn’t viewed in the same way on both sides of the Atlantic,” Total SA Chief Executive Officer Patrick Pouyanne, one of the signatories, said on Monday at a press conference in Paris. “We are working with those who come forward.”

The banding together on climate-change policy by BP Plc, Eni SpA, Royal Dutch Shell Plc, Statoil ASA, Total and BG Group Plc is unprecedented and follows comments by some of their CEOs calling for the industry to be part of the debate on a deal limiting greenhouse gases. It also highlights division within the sector as the top American companies, Exxon Mobil Corp. and Chevron Corp., decided to stay out of the European initiative.

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Shell and BP call for international carbon pricing deal

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Oil majors are pushing for scheme to limit emissions as they face growing criticism surrounding global warming

By Andrew Critchlow, Commodities editor: 01 Jun 2015

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Europe’s biggest oil companies, including Royal Dutch Shell and BP, have written an open letter calling for a binding global system of carbon trading in a bid to head off climate change critics.

In a joint statement, the chief executives of Shell, BP, Total, Eni, Statoil and BG Group said: “We need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part. We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low carbon technologies and the right resources at the right pace.”

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Royal Dutch Shell, BP plc Seek UN Support Over Carbon Pricing

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By: MICHEAL KAUFMAN: Published: Jun 1, 2015

Major oil exploration and production companies in Europe are coming together to seek the United Nations’ support for the first time, in putting forward a plan that will apply brakes to global warming.

As pressure mounts on oil companies over concerns of climate change, company executives have moved to hold direct talks with government officials ahead of a UN meeting, scheduled to take place in December this year in Paris, the Financial Times (FT) reported on Sunday.

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Big Data In Big Oil: How Shell Uses Analytics To Drive Business Success

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By Bernard Marr:  26 May 2015

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The oil and gas industries are facing major challenges – the costs of extraction are rising and the turbulent state of international politics adds to the difficulties of exploration and drilling for new reserves. In the face of big problems, its key players are turning to Big Data in the hope of finding solutions to these pressing issues.

Big Data is the name used to describe the theory and practice of applying advanced computer analysis to the ever-growing amount of digital information that we can collect and store from the world around us. Over the last few years businesses in every industry have enthusiastically developed data-led strategies for overcoming problems and solving challenges, and the oil and gas industries are no different.

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Oil company bosses’ bonuses linked to $1tn spending on extracting fossil fuels

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Bosses at the world’s big five oil companies have been showered with bonus payouts linked to a $1tn (£650bn) crescendo of spending on fossil fuel exploration and extraction over nine years, according to Guardian analysis of company reports.

FULL ARTICLE

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