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Oil and Gas Climate Initiative

May 26, 2020, 08:03 ET

Focusing on what matters

LONDON, May 26, 2020 /CNW/ — The unprecedented challenges the world is facing force us all to sharpen our focus on what really matters. Our immediate priority, as CEOs, is to do everything we can so that our people and communities are safe and capable of confronting the pandemic effectively. We will work to help the world recover from the economic shock of this crisis that has undoubtedly hit some more than others yet impacts us all. read more

By Brian Melley | AP  May 26, 2020 at 7:22 p.m. GMT+1

LOS ANGELES — Big Oil lost a pair of court battles Tuesday that could lead to trials in lawsuits by California cities and counties seeking damages for the impact of climate change.

The 9th U.S. Circuit Court of Appeals rejected arguments by energy companies and ruled state courts are the proper forum for lawsuits alleging producers promoted petroleum as environmentally responsible when they knew it was contributing to drought, wildfires, and sea level rise associated with global warming.

The lawsuits claim Chevron, Exxon Mobil, ConocoPhillips, BP, Royal Dutch Shell and other companies created a public nuisance and should pay for damage from climate change and help build sea walls and other infrastructure to protect against future impact — construction that could cost tens of billions of dollars. read more

The coronavirus pandemic has brought into sharp relief the existential threat posed to the world’s biggest oil companies from policies aimed at combating climate change by offering a glimpse into a future with little demand for petroleum products such as gasoline, diesel and jet fuel.

It has also brought to the fore a question with profound implications for the energy industry and Houston, where fortunes rise and fall with the price of oil. Has the virus — in two short but life-altering months — fundamentally changed society and consumer behavior, making it likely that global oil demand would peak earlier than expected, perhaps even during this decade? read more

Shell hoping voluntary severances will help weather oil crisis

Laura Hurst, Bloomberg May 21, 2020

Royal Dutch Shell will use measures including voluntary severance for staff to bolster its finances as the coronavirus pandemic batters profits, according to people with knowledge of the matter.In a note to staff, Chief Executive Officer Ben van Beurden wrote that the organization was being reshaped to make it leaner and more resilient, the people said. The company has already slashed spending and surprised investors with a two-thirds cut to its dividend.

Shell isn’t the only company making big changes to withstand the unprecedented oil-industry disruption caused by Covid-19. Most of its peers have made big spending reductions, while Norway’s Equinor ASA also cut its dividend.

BP Plc promised its employees their jobs were safe at least until the end of June, but companies including Chevron Corp., Marathon Oil Corp. and Halliburton Corp. are laying off employees. read more

* European oil majors boost share of low-carbon investments

* European CEOs see faster energy transition after coronavirus

* GRAPHIC: European oil majors’ spending tilts green tmsnrt.rs/3dWh9VV

By Ron Bousso and Shadia Nasralla

LONDON, May 18 (Reuters) – Europe’s top oil and gas companies have diverted a larger share of their cash to green energy projects since the coronavirus outbreak in a bet the global health crisis will leave a long-term dent in fossil fuel demand, according to a Reuters review of company statements and interviews with executives. read more

  Peter Milne: 15 May 2020 • 10 min read

ANALYSIS

Shell’s Prelude floating LNG facility off the WA coast was to be the first of many that would open up stranded gas reserves around the world thanks to the technical and project management prowess of Anglo-Dutch oil and gas giant Shell.It has not turned out that way.When the 488m-long giant arrived in Australia almost three years ago, Shell expected to receive cashflow from the Prelude in 2018.

While the Prelude did export LNG at about half its capacity for the second half of 2019, it is now idle.

Moored far off the Kimberley coast it is plagued with technical problems, dwindling gas reserves and safety processes condemned by the regulator despite Shell and its partners spending about $US19.3 billion ($A30.0 billion) to the end of 2019.

Neither Shell and its partners nor Australia have gained anything near what they expected from the giant experiment. read more

By Nick Cunningham – May 12, 2020, 7:00 PM CDT

Oil prices continue to rise on the prospect of a rebound in fuel demand as economies begin to reopen.  But there is a large difference between oil demand rising from recent lows and actually growing relative to pre-COVID-19 trends. In other words, demand destruction on the order of nearly 30 million barrels per day (mb/d) may have been brief, but we are a long way from a 100-mb/d oil market.

In fact, some are wondering whether the world will ever get back to 100 mb/d of oil demand. Even oil executives have their doubts. Royal Dutch Shell’s CEO Ben van Beurden recently suggested that a rebound is unlikely, even looking out beyond 2020. “We do not expect a recovery of oil prices or demand for our products in the medium term,” he said. read more

Oil giant Royal Dutch Shell, one of the market’s most reliable income providers, has cut its dividend for the first time in over 70 years. Matthew Partridge reports.

by: Dr Matthew Partridge: 7 MAY 2020

Last week Royal Dutch Shell cut its dividend for the first time since World War II, says Anjli Raval in the Financial Times. The payout for the first quarter was slashed from 47 cents to 16. No wonder. Not only did profits for the first three months of the year fall from $5.3bn last year to $2.9bn in 2020, but the oil major thinks that the situation will be “more severe” in the second quarter, with oil prices already down to $24 a barrel. The shares sank by 11% on the news.

The scale of the cut suggests that Shell believes that the crisis isn’t just a short-term event, but will cause “permanent change” in customers’ behaviour, say Anna Edwards and Laura Hurst on Bloomberg. The long-term impact on the way consumers work and travel “could be even more devastating for the industry” than the initial turmoil. Attitudes toward oil have been changing for some time “as the world shifts gradually toward cleaner forms of energy”. read more

Last week Royal Dutch Shell did something that would have been nearly unthinkable at the beginning of this year. The company cut its dividend for the first time in 75 years.

This is remarkable considering the ups and downs of the oil industry of the past few decades. Prices have collapsed many times since then, albeit we have never before seen a major benchmark turn negative.

But the COVID-19 pandemic has hit oil demand in an unprecedented way. A few days ago Bloomberg posted an article showing that energy demand has just dropped by the largest percentage since World War II (which was the last time Shell cut its dividend). read more

English translation of an article published by the Dutch FT.

Shell surprises investors with a historic decrease in dividend

Bert van Dijk and Saskia Jonker

• Shell is reducing the dividend due to challenging macroeconomic conditions.
• Shell’s dividend has been under pressure for some time.
• Due to sharply declining oil and gas prices and the drop in demand for oil products, net profit decreased 46% to $ 2.9 billion in the past quarter.

It took four board meetings, but then the time had come: oil and gas multinational Shell RDSA cut € 15.48-10.43% for the first time in 80 years in its dividend. “A difficult day for the company,” said Shell CEO Ben van Beurden. ‘No chairman of the board wants this on his track record, but it is wise to do’.

Shell reduces its quarterly dividend by 66% to $ 0.16 per share. It is the first time since World War II that Shell, one of the largest dividend payers in the world, is reducing the dividend. Shell paid $ 15 billion to shareholders last year. read more

Ron Bousso, Shadia Nasralla: APRIL 30, 2020

LONDON (Reuters) – Royal Dutch Shell RDSa. cut its dividend for the first time since World War Two on Thursday as the energy company retrenched in the face of an unprecedented drop in oil demand due to the coronavirus pandemic.

Shell also suspended the next tranche of its share buyback programme and said it was reducing oil and gas output by nearly a quarter after its net profit almost halved in the first three months of 2020.

Shell’s shares in London dropped 6.7% in early trading on Thursday, underperforming rival BP (BP.L).

“Given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent,” Shell Chairman Chad Holliday said. read more

By Nick Cunningham – Apr 26, 2020, 4:00 PM

The oil majors are facing a financial vice like they never have before.  With oil prices hovering around $20 per barrel and no end in sight for the global pandemic, the financial pain has only just begun. Norway’s Equinor became the first large oil company to cut its dividend, slashing it by 67 percent. It may not be the last.

On Friday, Italy’s Eni reported a 94 percent decline in profit in the first quarter, a period that did not capture the full brunt of the current slump. Eni cut spending by 30 percent and lowered its production guidance for this year by 100,000-125,000 bpd. “The period since March has been the most complex period the global economy has seen for more than 70 years,” Eni CEO Claudio Descalzi said. “Like everyone, we expect a complicated 2020.” read more

Bloomberg News: Javier Blas: April 26, 2020

(Bloomberg) — Negative oil prices, ships dawdling at sea with unwanted cargoes, and traders getting creative about where to stash oil. The next chapter in the oil crisis is now inevitable: great swathes of the petroleum industry are about to start shutting down.

The economic impact of the coronavirus has ripped through the oil industry in dramatic phases. First it destroyed demand as lockdowns shut factories and kept drivers at home. Then storage started filling up and traders resorted to ocean-going tankers to store crude in the hope of better prices ahead. read more

As oil prices collapse, Shell is postponing the final investment decisions (FIDs) for two planned projects, one in the U.S. Gulf of Mexico and another in the UK North Sea, a source with the supermajor told Reuters on Wednesday.

Shell is now thinking of postponing the FID for the development of the Whale discovery in the Gulf of Mexico, Reuters’ source said. The initial FID timeframe was to make the decision later in 2020, but it is now postponed to 2021.

Shell announced the large deepwater discovery in the U.S. Gulf of Mexico in January 2018, although it had made it six months earlier. Back then, the company said that the Whale discovery was “one of its largest U.S. Gulf of Mexico exploration finds in the past decade.” Shell is the operator of the planned project with a 60-percent interest, while U.S. supermajor Chevron holds the other 40 percent. read more

Nick Cunningham Oilprice.comApril 8, 2020

“We haven’t seen anything like what we’re experiencing today.”

ExxonMobil’s CEO Darren Woods said his company is expecting oil demand to decline by 20 to 30 percent because of the global pandemic and economic downturn. In response, Woods announced that the oil major could cut spending by 30 percent this year, with much of the pullback concentrated on its Permian operations. Exxon had held out longer than its rivals, waiting a month after the collapse in prices to revise down its spending program. read more

Apr. 5, 2020 2:47 PM ET|About: Exxon Mobil Corporation (XOM)|By: Liz Kiesche, SA News Editor

Some of the world’s largest oil companies  have raised more than $32B in recent weeks to ensure they have the cash to deal with the economic effects of the coronavirus while preserving dividends, the Financial Times reports.

ExxonMobil, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B), Equinor, Total, and BP (NYSE:BP) have sold debt to raise dollars or euros since mid-March.

They’re also paring capex, reducing costs, pausing stock buybacks, and delaying project approvals.

Besides the bond sales, Shell and BP have also obtained new multibillion-dollar credit facilities. read more