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A Perfect Storm For Petrochemicals

by John Donovan.

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One closely-watched project already under construction in western Pennsylvania faces heightened risk as well. Royal Dutch Shell is building a gargantuan ethane cracker in the heart of the Appalachian shale gas region… “The complex is likely to be less profitable than expected and face an extended period of financial distress.”

A Perfect Storm For Petrochemicals

By Nick Cunningham – Jun 04, 2020, 5:00 PM CDT

The oil majors have made huge bets on plastics and petrochemicals in recent years, but those investments look increasingly shaky following the COVID-19 pandemic and economic downturn. read more

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OilPrice.com: A Nightmare Scenario For Offshore Oil

by John Donovan.

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A Nightmare Scenario For Offshore Oil

Editorial Dept: Oilprice.com: May 31, 2020

Between low demand, soaring inventories, depressed prices, a global pandemic, and now, hurricane season, it seems a perfect storm is forming around the offshore oil industry.

The world’s offshore oil market, responsible for 30 percent of all the world’s oil production, is facing an impossible set of challenges. With oil sitting at half the price of its yearly high, and doubts forming around the future of demand, in addition to the ongoing COVID-19 pandemic wreaking havoc on the global economy, companies are struggling to rein in capital spending and are beginning to rethink the future of key projects. read more

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OilPrice.com: Has Demand For Oil Already Peaked?

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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

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OilPrice.com: The LNG Market Is “Imploding”

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Nick Cunningham Oilprice.comApril 28, 2020

While everyone is understandably watching the meltdown in the crude oil market, the global market for natural gas is also cratering.

At least 20 cargoes of U.S. liquefied natural gas (LNG) have been cancelled by buyers in Asia and Europe, according to Reuters. The global pandemic and the unfolding economic crisis have slashed demand for gas worldwide. Cheniere Energy, one of the main exporters of U.S. LNG, has seen an estimated 10 cargoes cancelled by buyers halfway around the world, Reuters said. read more

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Big Oil’s Dilemma: Cut Dividends Or Cut Operations

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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

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OilPrice.com: Shell Postpones Investment On Two Major Oil Projects

by John Donovan.

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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

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OilPrice.com: Supermajor Slashes Spending As Oil Prices Collapse

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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

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OilPrice.com: Oil Industry Joins The Fight Against Coronavirus

by John Donovan.

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Shell, for example, said last month that it was diverting resources to the increased production of isopropyl alcohol, which is the primary ingredient in hand sanitizers. It also said it would make 2.5 million liters of the ingredient freely available to the healthcare sector in the Netherlands. The supermajor is also offering free food and drink to healthcare professionals at 15,000 retail outlets globally as well as to truck drivers and delivery personnel “who are vital to maintaining supplies.”

Irina Slav: Oilprice.com April 5, 2020

Ventilators from Tesla. Hand sanitizer from Anheuser Busch and fellow distillers. Face masks from General Motors. It sounds like something out of a science fiction—or possibly parody—novel, but it is, in fact, our new reality: the reality where businesses change to survive and help fight the pandemic that shook the world. And oil and gas players are joining the effort.

Call it what you will — an attempt to regain credibility in the public eye, a way to take advantage of a bad situation, or simply doing the only reasonable thing to do in the circumstances, but oil and gas majors are indeed trying to help. read more

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Is Gazprom’s LNG Megaproject Doomed To Fail?

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Viktor Katona: Oilprice.com April 4, 2020

The gas giant Gazprom is no longer in the spotlight after the US Treasury sanctioned Rosneft, the Russian national oil company, most probably triggering the collapse of the OPEC+ agreement and bringing about an unexpectedly low pricing environment for March 2020 within both the oil and gas segments. Having launched Power of Siberia to China, Gazprom is now intent on bringing Nord Stream-2 online before the end of the year, moving its own pipe-laying vessel from the Russian Far East to the Baltic region to deliver on all its major promises from the 2010s. Yet there is one project that has had significant problems starting up, combining in itself all the deficiencies of modern-day Russia. read more

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OilPrice.com: Prepare For The Next Wave Of Oil Bankruptcies

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Alex Kimani: Oilprice.com March 24, 2020

Last year, the energy industry was rocked by record bankruptcies and write-downs that did not spare even the oil majors. According to Energy and Restructuring law firm Hayes and Boone’s, a grand total of 50 energy companies filed for bankruptcy last year, including 33 oil and gas producers, 15 oilfield services companies and two midstream companies.

Meanwhile, Chevron Corp., Schlumberger, and Royal Dutch Shell announced multi-billion dollar asset impairments citing unfavorable macro outlook. read more

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OilPrice.com: Are Oil Majors Facing A Terminal Decline?

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By Nick Cunningham – Mar 01, 2020, 4:00 PM CST

ExxonMobil saw its share price nosedive by roughly 15 percent in the past week, one in a series of oil companies that finds itself in a freefall.

Four other oil majors – Chevron, BP, Shell and Total – also declined sharply, dragged down by the worst weekly loss for oil prices in more than four years.

But the problems for the oil majors run much deeper than the coronavirus, and their share price declines have been underway for quite some time. read more

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OilPrice.com: This Supermajor Is Diving Into The Green Hydrogen Game

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Haley Zaremba: Oilprice.com February 29, 2020

Hydrogen is often hailed as a silver bullet solution to emissions-free fuel since it burns clean, leaving nothing but water vapor, but the reality of using and producing green hydrogen is much more complicated. Hydrogen is already used as a power source in a lot of modern industries, including ammonia production, in refineries and as a feedstock for chemicals. The vast majority of the hydrogen in use, however, is not green hydrogen, but instead is what is known as “gray hydrogen.” While the hydrogen itself burns clean, the means of producing that hydrogen is actually fossil-fuels intensive (most often using coal or natural gas) and therefore does nothing in the way of decarbonizing the industries in which it is used. read more

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OilPrice.com: Shell Not Competing With BP Over Net Zero Emissions Goals

by John Donovan.

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Shell doesn’t intend to “get into an arms race” with peer supermajor BP over goals to reduce its carbon footprint, Maarten Wetselaar, Shell’s Integrated Gas & New Energies Director, told The Times a week after BP joined the pack of oil majors that have set carbon-reducing goals.

In December 2018, in an industry first, Shell said that it plans to set short-term targets for reducing the net carbon footprint of the energy products it sells, and to link those targets with executive remuneration. read more

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OilPrice.com: Canada Rocked By Anti-Pipeline Protests

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By Nick Cunningham – Feb 15, 2020, 2:00 PM CST

Protests continue to swell over the Coastal Gaslink Pipeline, a long-distance pipeline carrying natural gas from Alberta to the Pacific Coast.

The pipeline’s route would travel more than 400 miles to the coast at Kitimat, British Columbia, where it intends to deliver gas to a massive LNG export project, under construction by a joint venture led by Royal Dutch Shell.

The $6.2 billion Coastal Gaslink pipeline, which is being built by TC Energy, runs through territory of the Wet’suwet’en Nation. Some First Nations chiefs support the pipeline, but others do not. Those opposed have demanded a halt to construction.

The Royal Canadian Mounted Police (RCMP) began arresting indigenous peoples on their territory earlier this month. “Forcing indigenous peoples off their own territory is in complete and disgusting violation of the United Nations Declaration on the Right of Indigenous Peoples,” Grand Chief Stewart Phillip of the Union of BC Indian Chiefs said in early February. read more

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OilPrice.com: Oil Market Falls Deeper Into Abyss

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By Tom Kool – Jan 31, 2020, 2:00 PM CST

Shell’s earnings fall by half. Royal Dutch Shell (NYSE: RDS.A) saw its fourth quarter earnings fall in half from a year earlier, weighed down by lower oil and gas prices, as well as weaker refining and chemical margins. “All macroeconomic indicators are working against us,” Shell CEO Ben van Beurden said. The disappointing results could slow the pace of share buybacks and result in more asset sales. Shell’s reserve life declined for the sixth year in a row, now only sitting on eight years’ worth of reserves. read more

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OilPrice.com: Shell’s Slide Is A Major Red Flag For Oil Markets

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By Nick Cunningham – Jan 30, 2020, 5:00 PM CST

Royal Dutch Shell reported a steep drop in earnings in the fourth quarter, and the financial squeeze may slow the pace of share buybacks and force more asset sales.

Shell’s earnings of $2.9 billion were down by half from a year earlier, leading to a 3 percent drop in its share price on Thursday morning.

After the takeover of BG Group several years ago, the Anglo-Dutch company is now just as much a natural gas major as it is an oil major, so the global gas glut is hitting the company hard. Shell is one of the largest LNG exporters in the world. LNG prices in Asia are at a 10-year low and showing very little signs of life. read more

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