Oil Sands
Oil Sands Boom Dries Up in Alberta, Taking Thousands of Jobs With it
By IAN AUSTEN: OCT. 12, 2015
FORT McMURRAY, Alberta — At a camp for oil workers here, a collection of 16 three-story buildings that once housed 2,000 workers sits empty. A parking lot at a neighboring camp is now dotted with abandoned cars. With oil prices falling precipitously, capital-intensive projects rooted in the heavy crude mined from Alberta’s oil sands are losing money, contributing to the loss of about 35,000 energy industry jobs across the province.
Yet Alberta Highway 63, the major artery connecting Northern Alberta’s oil sands with the rest of the country, still buzzes with traffic. Tractor-trailers hauling loads that resemble rolling petrochemical plants parade past fleets of buses used to shuttle workers. Most vehicles carry “buggy whips” — bright orange pennants attached to tall spring-loaded wands — to help prevent them from being run over by the 1.6-million-pound dump trucks used in the oil sands mines.
Here’s How Shell Can Restart Its Tar Sands Projects In Canada
By: MICHEAL KAUFMAN
Exploring for new oil has now become a difficult task for the oil majors. Oil and gas are now mostly situated in the deep-waters, Canadian tar sands and the Arctic waters where the cost of exploration and production is very high. These high costs coupled with the lower crude oil prices make the task difficult for oil companies.
Crude oil prices last week fell again following claims by Iran to double its production if a nuclear deal was reached. The US benchmark for crude oil, West Texas Intermediate (WTI) which had gone high at $60 per barrel, has plunged again to less than $45 per barrel.
Oil Spillage: Nigerian High Court Orders Shell to Pay N30m
6 June 2015
Oil Spillage: S-Court Orders Shell to Pay N30m to Four Communities
The Supreme Court, yesterday, ordered Shell Petroleum Development Company of Nigeria Limited to pay the sum of N30,288,681 to four communities in Delta State.
The apex court found the company culpable for the oil spillage that adversely affected the communities about 32 years ago.
The communities to benefit from the judgment of the court yesterday are Obotobo, Sokebolo, Ofogbene (Ezon Burutu) and Ekeremor Zion (Ezon Asa).
Some leaders of the communities had in 1983, dragged the oil company before a High Court of the then Bendel State.
Prices Fall to a Six-Year Low for U.S. Oil
Article by Stanley Reed published 17 March 2015 in the New York edition of the New York Times
Prices Fall to a Six-Year Low for U.S. Oil
Oil prices fell to six-year lows on Monday in the face of concerns that a glut in the United States was outpacing already-brimming storage facilities.
Additionally, the Organization of the Petroleum Exporting Countries published a report suggesting that the cartel remained reluctant to intervene to prop up prices.
The direction of oil prices, which had risen sharply from January lows, has fallen back in recent days. Traders are now focused on the second quarter of the year, when demand for oil is traditionally weak because of the end of winter and scheduled refinery shutdowns for maintenance.
On Monday, the price of West Texas Intermediate crude, the main United States benchmark, fell about 2 percent to about $44 a barrel, a six-year low, while Brent crude, the international benchmark, fell by about 2 percent to about $53 a barrel.
Keystone and the Riddle of the Tar Sands
BY MARK DOWIE 2/25/15 AT 10:49 PM
Late 21st-century graduate students of business studying the growing problem of stranded assets will almost certainly focus on the history of Canada’s Athabasca Oil Sands (a.k.a. the tar sands). The case studies they read will either describe the gradual abandonment of the world’s largest reserve of bituminous crude or they will read about the tar sands’ miraculous last-minute escape from becoming the world’s largest stranded asset.
For either outcome, the turning point they will look back on is just about now.
Another nail in the coffin of tar sands
BBC NEWS: Obama vetoes Keystone oil pipeline bill: 24 Feb 2015
US President Barack Obama has vetoed a bill that would have approved construction of the Keystone XL oil pipeline.
The Republican-led Congress sent the bill to the president on Tuesday.
White House spokesman Josh Earnest said Obama vetoed the bill “without any drama or fanfare or delay”.
The 875-mile (1,400km) pipeline would carry tar sands oil from Alberta, Canada, to the US state of Nebraska where it joins pipes running to Texas.
The project has pitted Republicans and other supporters, who say it will create much needed jobs, against many Democrats and environmentalists, who warn the pipeline will add to carbon emissions and contribute to global warming.
Shell Canada withdraws oilsands mine application as a cost-cutting measure
By Dan Healing of the Calgary Herald
Extracts
The Pierre River oilsands mine proposed by Shell Canada in 2007, split out of a joint application in 2009 and delayed indefinitely last year has been withdrawn entirely from the regulatory approval process.
“The Pierre River mine remains a very long-term opportunity for us but it’s not currently a priority,” said Lorraine Mitchelmore, president of Calgary-based Shell Canada, in a news release on Monday.
“Our current focus is on making our heavy oil business as economically and environmentally competitive as possible. We will continue to hold the leases and can reapply in the future when the time is right.”
Slump in Oil Prices Brings Pressure, and Investment Opportunity
An article by Michael Corkery and Peter Eavis published 2 Feb 2015 by The New York Times under the headline:
“Slump in Oil Prices Brings Pressure, and Investment Opportunity”
American history is littered with oil busts that created big winners and losers.
Now, as the cracks appear in the latest energy boom, the forces of failure and opportunity are stirring again. Resolute Energy, a Colorado company that borrowed big in the boom, is among those in an endgame that is being played up and down Wall Street and in the vast oil fields that new drilling methods have opened in recent years.
It is a struggle that could take place at scores of other companies, leading to thousands of layoffs, as well as losses for banks and investors. At the same time, new fortunes stand to be made.
Who Will Rule the Oil Market?
OPINION ARTICLE BY DANIEL YERGIN PUBLISHED IN PRINT BY THE NEW YORK TIMES ON SATURDAY 25 JAN 2015
WASHINGTON — A HISTORIC change of roles is at the heart of the clamor and turmoil over the collapse of oil prices, which have plummeted by 50 percent since September. For decades, Saudi Arabia, backed by the Persian Gulf emirates, was described as the “swing producer.” With its immense production capacity, it could raise or lower its output to help the global market adjust to shortages or surpluses.
But on Nov. 27, at the OPEC meeting in Vienna, Saudi Arabia effectively resigned from that role and OPEC handed over all responsibility for oil prices to the market, which the Saudi oil minister, Ali Al-Naimi, predicted would “stabilize itself eventually.” OPEC’s decision was hardly unanimous. Venezuela and Iran, their economies in deep trouble, lobbied hard for production cutbacks, to no avail. Afterward, Iran accused Saudi Arabia of waging an “oil war” and being part of a “plot” against it.
Jesse Colombo, the economic analyst who predicted the oil prices bust
FULL CREDIT TO THE EXPERT WHO CORRECTLY PREDICTED THE OIL PRICE CRASH
By John Donovan
In June of this year Forbes.com published an extensive prescient article by Jesse Colombo, an economic analyst, under the headline:
“9 Reasons Why Oil Prices May Be Headed For A Bust”
His prediction made 6 months ago:
“There are a growing number of reasons, however, why crude oil prices are likely to finally experience a bust in the not-too-distant future.”
Jesse Colombo correctly predicted an event of huge significance. Ask Putin or Shell’s Ben van Beurden.
Some further extracts from his brilliant article, which deserves reading in full.
While extreme aggregate trading positions can persist for quite a while, as is the case in the crude oil market for the past few years, they are still a reliable indication that a powerful market reversal is likely to occur when the proper catalyst eventually appears and sends speculators heading for the exits. So far, no bearish catalyst has presented itself in the crude oil market, but the other points that I’ve listed in this piece may combine to form a perfect storm that finally causes the oil market to crack.
Shell and the National Gallery: welcome to a Moral Maze
Spotted this article on the website of the former Royal Dutch Shell executive, Paddy Briggs.
By Paddy Briggs
I went to the superb exhibition “Rembrandt: The Late Works” at the National Gallery yesterday. The exhibition is sponsored by Shell – quite strongly as it happens. There are a couple of prominent Shell promotional displays and the Shell emblem is visible all over, though not within the actual gallery where the works are to be seen. This suggests that the Shell sponsorship was financially quite large, even that the event, in straightened times for the Arts, might not have gone ahead without it.
Shell one of 5 Companies Al Gore Says Are Doomed
“Royal Dutch Shell is another company with a doomed oil sands project, according to the Carbon Tracker Initiative. Its Carmon Creek project needs oil prices to hit $157 per barrel in order to be profitable. On top of that, Royal Dutch Shell is seeking to drill for oil in the Arctic, which has already wasted $5 billion of investors’ capital and would waste more money if drilling restarted.”
By John Donovan
According to an article by Matt DiLallo published by The Motley Fool on 23 August, former US VP Al Gore believes that the balance sheets of ExxonMobil, Royal Dutch Shell Plc, ConocoPhillips, Total SA and BP plc include $7 trillion of worthless ‘unburnable” carbon assets.
Extract
“This unburnable carbon is the oil, gas, and coal that is still in the earth that, if extracted and burned, would push the globe over the edge in terms of climate change. Because this is an edge we can’t cross, it would suggest that the companies owning the assets are all but doomed.”
BP a better investment than Shell right now
Extracts from an article by David Thorpe published 22 July 2014 by What Investment under the headline: “M&G: BP is a better investment than Shell right now”
Felton’s reason for not investing in Shell at present is that he believes the company has made a significant strategic blunder.
‘Shell has always been the high cost, low risk producer. They are the archetypal supertanker of the oil industry. But a few years ago, they began to focus on extracting very expensive oil from the Canadian sands. The rationale was that the higher production cost would be offset by the ease of transporting the oil just next door to the US. And that made sense, when the US was the largest oil market in the world, but the rapid acceleration of the fracking industry means that the US could become self-sufficient in energy within one or two years, which means Shell wouldn’t have that market.’