Posts Tagged ‘North Sea Oil’

MARK WILLIAMSON

28 Oct 2011

ROYAL Dutch Shell said it would curb investment in Europe where it expects the economy to stagnate, but made clear it would still spend in the North Sea.

Announcing bumper profits driven by high oil prices, the oil and gas giant said it will shift a growing share of its investment to places like Qatar, where the launch of huge projects will underpin growth for years.

Noting that Shell only devotes 15% of its investment to Europe, chief financial officer Simon Henry said the continent’s share will shrink amid concerns about the fallout from the debt crisis.

The day after European ministers finally agreed a plan to try to stabilise the eurozone, Mr Henry indicated Shell executives have been unimpressed by the response to the problems.

He told reporters: “Europe’s macroeconomic position can only recover and the sovereign debt crisis can only be addressed through underlying economic growth. We do not see the EU creating the conditions for that – in fact quite the opposite.

“Most moves by the [European] Commission one way or another tend to almost directly or indirectly reduce the competitiveness of European industry.”

Mr Henry said Shell had identified plenty of global opportunities to put its money to good use, including developing 20 major projects in countries such as Canada and Australia that will underpin growth for years. However, Shell still sees scope to invest in the North Sea.

Mr Henry noted Shell recently confirmed it will invest in the £4.5 billion BP-led Clair Ridge project west of Shetland, among the 20 growth projects he cited.

Earlier this year Shell approved plans for the £3bn redevelopment of the Schiehallion and Loyal fields, also west of Shetland.

In May, Shell’s chief executive Peter Voser told The Herald that it could remain in the North Sea for decades.

However, the firm told the Government that tax hikes in the Budget could jeopardise investment in smaller projects.

Shell said it will continue to dispose of non-core assets, although at a slower pace than in the past two years. Shell has already raised $6.2bn (£3.9bn) against a target of $5bn.

Richard Griffith, an oil and gas analyst at Evolution Securities, said Shell’s third quarter results showed the company is in a “sweet spot”.

Stripping out the effect of changes in inventories, the company doubled third quarter profits to $7.2bn, from $3.5bn in the same period last year.

Shell benefited from a 48% rise in oil prices – partly caused by unrest in the Middle East and Africa. Production increased by 2% annually, excluding asset sales, to 3.01 million barrels oil equivalent daily.

Upstream earnings increased 58% annually, to $5.4bn. Profits in the downstream business, which includes forecourt sales increased by 25% to $1.8bn.

Asked what respite Shell would provide to hard-pressed motorists, Mr Henry said: “We do a good job in getting the lowest cost fuel to customers. The Government is probably the first people you should call.”

Mr Henry said the Government takes two-thirds of the price of a litre, adding: “It is a volume business on which we make a very small margin.”

Mr Henry said Shell could not use the profits from its upstream business to subsidise the downstream.

The company announced an unchanged third quarter dividend of $0.42 per ordinary share.

Shares in Royal Dutch Shell closed up 27p at £22.80.

SOURCE ARTICLE

By STEVE HAWKES, Business Editor: Friday 28 October 2011

*£12.5bn cash in the bank

*90,000 staff around the world

*3m output in millions of barrels a day

SOARING oil and gas prices have sent profits surging to £49million a day at SHELL.

The energy giant made a whopping £4.5billion over the three months to October — DOUBLE the same period a year ago.

Yesterday’s figures come as drivers are being forced off the road by soaring petrol prices as the cost of oil hits record highs.

AA chiefs claim a quarter of motorists are cutting back.

AA president Edmund King said motorists “will not be pleased” to see oil giants making a killing.

But he insisted many now blame the Chancellor more than oil companies for the huge prices they pay at the pump.

Tax makes up 65 per cent of the average forecourt bill — the highest proportion of anywhere in Europe.

Mr King told Sun City: “We ask motorists who they blame for high fuel prices and they put the Government first.

“Duty is set to go up by another 3p to 4p per litre on January 1, but it’s already having a big effect on the economy. It’s vital the Government freezes duty or even cuts it. Record prices are driving motorists off the road.”

Shell once again insisted it hardly made a bean at the petrol pumps.

Three-quarters of the haul came from selling the crude oil pumped out of the ground around the world.

Chief exec Peter Voser also insisted the firm’s stonking results were good for Brits.

He said: “Our profits pay for Shell’s substantial investments in new energy projects.

“They ensure low-cost, reliable, energy supplies for our customers and create value for our shareholders.”

Experts said Shell was benefiting from its huge investment in new exploration projects in recent years.

One of the biggest boosts has come from controversial Tar Sands projects in Canada — where crude lies just below the Earth’s surface.

Shell is also cashing in on the boom in gas with sales of liquefied natural gas up 12 per cent following the opening of a huge plant in Qatar.

Just hours after Shell unveiled its results, American rival EXXON went even better — posting quarterly profits of an incredible £6.4billion.

Separately the European Commission sparked a row with the UK by calling for tougher safety laws in the North Sea. Brussels said the risk of a spill remained “unacceptably high”.

SOURCE ARTICLE

*from newspaper version of article

13 October 2011

BP has been given the go ahead to proceed with a new £4.5bn oil project west of the Shetland Islands.

The BP-operated scheme is an extension of the existing Clair oil field, and will also include investment by fellow oil firms Shell, ConocoPhillips and Chevron.

David Cameron said the news was a “massive boost for jobs and growth”.

BP said it and its partners were now investing almost £10bn in North Sea oil and gas work over the next five years.

‘Maintaining production’

BP said it would use the latest technology to maximise recovery from the new Clair Ridge project.

“Although it began over 40 years ago, the story of the North Sea oil industry has a long way yet to run,” said BP chief executive Bob Dudley.

“After some years of decline, we now see the potential to maintain our production from the North Sea at around 200,000-250,000 barrels of oil equivalent a day until 2030.

“And we are working on projects that will take production from some of our largest fields out towards 2050.”

The announcement of the £4.5bn Clair Ridge scheme comes after BP and its partners revealed plans earlier this year for a £3bn redevelopment of the Schielhallion and Loyal fields, also to the west of the Shetland Islands.

In addition, they are investing £700m in the development of the Kinnoull field in the central North Sea.

BP and German firm RWE are also continuing to invest £550m in the North Sea’s Devenick gas field.

Taking all these projects together, BP says they will provide 3,000 jobs across the oil and gas supply chain.

SOURCE ARTICLE

13 August 2011 Last updated at 03:02

Oil giant Royal Dutch Shell has said it is working to stop a leak at one of its North Sea oil platforms.

The leak was found near the Gannet Alpha platform, 180 km (113 miles) from Aberdeen, Scotland.

The company would not say how much oil may have been spilt so far, though it said it had “stemmed the leak significantly”.

One of the wells at the Gannet oilfield has been closed, but the company would not say if production was reduced.

The company says it has sent a clean-up vessel to the location and has a plane monitoring the surface.

The leak was found in a flow line connecting an oil well to the platform.

‘Finite amount’

Shell confirmed the leak was continuing but said it was being reduced and was “not a significant spill”.

The UK Department of Energy and Climate Change said it was in contact with Shell and investigating the incident in the usual way.

The department’s spokesman added that it understood from Shell that there was a “finite amount of oil that can be dispersed” but stressed that regulators were taking the leak seriously.

The Health and Safety executive confirmed it was monitoring the situation.

A Scottish government spokesman also said it was monitoring the situation and would update ministers, adding that Marine Scotland, which manages Scotland’s waters, was in close contact with key organisations including Shell.

A Shell spokesman said it was “managing” the leak.

“We deployed a remote-operated vehicle to check for a sub-sea leak after a light sheen was noticed in the area.

“We have stemmed the leak significantly and we are taking further measures to isolate it.

“The sub-sea well has been shut in, and the flow line is being de-pressurised,” he added.

It is unknown how much oil may already have been spilt.

The Gannet oil field reportedly produced about 13,500 barrels of oil per day between January and April of this year.

Friends of the Earth Scotland said the spill showed the dangers of offshore drilling in the North Sea.

“Any spill, however small, should serve as a warning sign and encourage us to look to a clean, renewable energy future, rather than continuing to invest in dirty oil,” said Juliet Swann, head of campaigns at the environmental group.

The field is co-owned by Esso, a subsidiary of US oil firm Exxon but operated by Shell.

SOURCE ARTICLE

AUGUST 12, 2011 12.23 P.M. ET

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB) Friday confirmed that an oil spill has occurred at its Gannet Alpha platform in the U.K. North Sea.

“We can confirm we are managing an oil leak in a flow line that serves the Shell-operated Gannet Alpha platform,” said Shell spokesman Kim Blomley.

“We have stemmed the leak significantly and we are taking further measures to isolate it,” he said. “The subsea well has been shut in, and the flow line is being depressurized. We continue to monitor the situation on the surface and subsea.”

Blomley said Shell has informed the relevant U.K. authorities.

The Maritime and Coastguard Agency said: “We are aware of the incident, our counter-pollution and salvage officer is monitoring the situation.” The Health and Safety Executive said it was making enquiries into the incident.

The platform is located 180 kilometers east of Aberdeen. Shell operates the platform along with partner ExxonMobil Corp.’s (XOM) U.K. unit Esso.

-By Alexis Flynn and Konstantin Rozhnov, Dow Jones Newswires; +44 207842 9471, alexis.flynn@dowjones.com

SOURCE WSJ ARTICLE

mark williamson QATAR

1 Jun 2011

THE chief executive of Shell said the North Sea was still important for the oil and gas giant, which could invest in the province for decades to come.

Peter Voser reiterated Shell’s concerns that the controversial Budget tax hike could make some small developments unviable.

However, he said the company would still go ahead with big investments in the kind of bumper projects that could generate the returns it targets.

Asked where the North Sea fit with Shell’s strategy, Mr Voser said: “It’s an important area for us still.

“Because of the new tax we see smaller and more mature (projects) being challenged on the profitability point of view but we see the two bigger projects going ahead, and they are multibillion projects.”

FULL ARTICLE

upstreamonline: In-depth revision ordered at Brent Charlie following major gas leaks

The UK Health & Safety Executive (HSE) has taken the rare step of ordering a thorough safety review at Shell’s Brent Charlie platform following two major gas leaks.

ROB WATTS London  06 May 2011 01:53 GMT

The HSE has told Shell to submit a revised safety case for the Brent Charlie platform after gas was detected on its topsides following leaks on 12 January this year and 27 September 2010, Upstream can reveal.

Shell, which took the decision itself to close the platform after the January incident, has been battling for some time to resolve technically complex issues related to the venting of gas from inside one the platform’s huge concrete legs — Column 1 (C1) — and dispersing it effectively away from the platform.

The operator now expects the ageing Brent field to remain shut down for several more months.

Gas can build up periodically in some of the platform’s large concrete storage cells on the seabed, where oil and produced water are stored after processing, and can then migrate into the C1 leg. This is called a ‘glug’.

The Brent field has been shut-in since mid-January when a 25-tonne protective fender fell from the Brent Bravo platform into the sea, two days after the gas leak that prompted Shell to shut in Brent Charlie.

The Anglo-Dutch operator has been working since to resolve the two separate problems.

Shell told Upstream: “Production will not resume until all necessary work is done and we now expect that could be some months rather than weeks.”

The HSE said: “We can confirm that Shell… has been directed by HSE to prepare a revision of the Brent Charlie safety case and resubmit the safety case to HSE for assessment.”

The regulator said that the current safety case “does not adequately consider the major accident hazard arising from the uncontrolled release of flammable or explosive substances from the storage cells into Column 1”.

Brent Charlie will remain shut in if the HSE is not satisfied Shell has found a solution that mitigates the risk of a major incident happening.

The request from the HSE is understood to be one of the first since the UK’s goal-setting offshore safety regime was introduced in the wake the 1988 Piper Alpha disaster.

It could also mark an apparent willingness on the part of the regulator to use an unconventional method of enforcing offshore safety requirements, normally done using Improvement or Prohibition notices.

Oil and gas installations off the UK cannot operate without an approved safety case.

Shell said: “The safety case for Brent Charlie has not been withdrawn. The HSE has asked Shell to provide more detail on the part of the safety case which relates to Column 1.

“There was a ‘glug’ in 2010. After another occurred on 12 January 2011 Shell made the decision to shut down the platform.

“The additional material for the safety case was requested after the January 2011 incident. We are working towards restarting production as soon as safely possible.”

Shell confirmed it is also facing other issues at Brent Charlie, including the thinning of export pipeline walls, which will also have to be overcome before the platforms can be restarted.

Published: 06 May 2011 01:53 GMT  | Last updated: 06 May 2011 08:19 GMT

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April 29, 2011

LONDON, April 29 (UPI) — Royal Dutch Shell suggested it might pull out of developments in the North Sea because of a tax increase imposed by the British government, a director said.

British Chancellor of the Exchequer George Osborne imposed a duty on oil and gas producers in an effort to take advantage of massive oil profits reported by international energy companies.

Oil and gas developers posted record first quarter profits as energy prices soar in response to global economic recovery, a weak U.S. dollar and unrest in some of the Middle East’s largest oil-producing nations.

Simon Henry, financial director at Shell, was quoted by London’s Daily Telegraph as saying Osborne’s tax would have “significant impact” on the company’s plans. He added that his company might not move forward with North Sea development because of the tax.

Shell posted $6.9 billion profit for the first quarter of 2010 though production was down modestly compared with the same period last year.

SOURCE ARTICLE

SHELL is slashing investment in the North Sea over a Budget Day tax hike – despite making £1.9million an hour.

The giant yesterday revealed the rise meant it was now “uneconomic” to develop smaller UK oil and gas fields.

Shell’s quarterly profits were up forty per cent and totalled £4.1billion.

Chief finance officer Simon Henry said the group would only invest in two new projects. Other work has gone. He said: “The irony is we were just beginning to look at what opportunities there were in the North Sea again. We hadn’t worked up the projects yet and that work now stops.”

The move threatens hundreds of jobs in the North Sea – and is the latest backlash to the Chancellor’s Budget Day clampdown.

George Osborne raised the tax on North Sea production from 50 to 62 per cent last month to pay for lower fuel duty for Britain’s motorists.

He said it would help fund the penny cut on Budget Day and the scrapping of a fuel tax “escalator”.

The Government is also threatening to cut tax relief on the decommissioning work needed to take rigs apart when oil fields reach the end of their life.

Shell yesterday booked a £660million charge to cover the higher UK tax hit.

But Mr Henry said it would not pass higher costs on at the pump, insisting there was no “linkage”.

The firm put its bumper first quarter results down to the high oil prices and fatter margins in Shell’s refining empire.

Mr Henry insisted it only made a penny from every litre of petrol it sells. And he hinted that pump prices could start to fall, adding: “The oil price is perhaps a little bit higher than the supply-demand position suggests it should be.”

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