Key Energy Services said it will appoint a new chief executive as the company faces potential de-listing from the New York Stock Exchange.
On the last afternoon of 2015, an oil tanker filled with light, sweet crude from South Texas’ Eagle Ford Shale formation eased out of NuStar’s North Beach terminal in Corpus Christi, and headed for Trieste, Italy.
Perhaps the only thing more egregious than the prosecution of former BP engineer Kurt Mix was the way that prosecution ended: with a whimper so barely audible you may have missed it.
You may not have noticed it, but the planet was saved this week.
The U.S. energy industry missed an opportunity to help shape the Obama Administration’s climate change policy. Big producers like Exxon Mobil and Chevron have largely shunned efforts by their European counterparts to develop a common stance on climate change that could influence policy.
So much for “all the above.” President Obama’s “clean power plan” for combatting climate change, unveiled Aug. 3, makes it clear that the U.S. strategy is to plunge head first into renewable energy -- no bridge fuels, no gradual migration to a low-carbon future.
The record $18.7billion Deepwater Horizon settlement is, first and foremost, a victory for BP. The company’s shareholders clearly recognize this. After the settlement was announced Thursday, giddy investors sent the company’s shares up more than 5%, adding more than $5billion to its market value.
A committee of the U.S. House of Representatives last month approved selling some oil from the Strategic Petroleum Reserve to pay for speeding government approvals for new medicine. It’s like raiding your kids’ college fund to buy groceries. Selling an asset, in this case oil, to fund a stop-gap budgetary measure that ought to be paid for through traditional funding avenues is not just short-sighted, it’s foolhardy. Short-sighted spending initiatives aren’t a congressional novelty, of course, but there’s a bigger issue behind the House’s interest in raiding the SPR, one that lawmakers on the House Energy and Commerce Committee seem unwilling to address fully. The 21 Century Cures Act that the committee approved would overhaul the process for approving new drugs and medical devices by pumping an additional $13billion over 10 years into the National Institutes of Health and the Food and Drug Administration.
I was off by one letter. If you had told me a year ago that Shell was going to make one of the biggest acquisitions in energy industry history, I would have guessed the target was BP. Instead, Shell plunked down $70 billion for BG after a month of whirlwind talks that reportedly began with a Sunday afternoon phone call between the two top executives.
Flames once again ripped through the darkened skies over the Gulf of Mexico. Workers, fearing for their lives, jumped into the black waters. Four died in the blast. Forty-five others were injured, including 16 who were hospitalized. The chilling video of fire engulfing an oil processing platform early Wednesday off the Mexican coast summons the ghosts of another disaster that happened in the same body of water five years ago. The Deepwater Horizon disaster was more deadly, killing 11 workers and seriously injuring 17 more.
During the holidays, a friend was driving home and said she spotted a fracking well soon after she crossed into Texas. She wasn’t happy about it. Another friend posted on Facebook a picture of gas prices below $2 a gallon — something that hasn’t happened in more than five years — and commented that the low price made him feel as if “he was stealing something.” In America, the world’s largest energy-consuming nation, the biggest fractures occur not in deep underground shale formations but in the way we separate our perceptions of energy from reality.
The precipitous decline in oil prices during the past six months creates the sort of economic upheaval that’s likely to alter the course of companies and countries. Brent crude has been steadily falling since mid-June, and now sells for almost half the $115 a barrel it did then. Even if oil prices rebound in a few months – which isn’t likely – the Bust of 2014, as it will become known, is going to leave a lasting mark. We’re already beginning to see reactions in the energy industry. Earlier this month, ConocoPhillips, the biggest U.S. independent producer, said it would slash its 2015 capital budget by 20 percent. A few weeks earlier, Halliburton announced plans to buy oilfield service rival Baker Hughes for $35 billion, which was quickly followed by plans to shed 1,000 jobs in the Eastern Hemisphere. In mid-December, chief executive David Lesar said more cuts could follow next year as the market for drilling services weakens. BP CEO Bob Dudley emphasized recently that his company’s costs are too high to compete in an environment of lower crude prices. The company plans to cut jobs and may also close or sell some sites or plants, Dudley said. BP, of course, has long been rumored as a takeover target, with Shell mentioned as the most likely suitor. BP’s shares have trailed its peers since the Deepwater Horizon disaster in April 2010, and greater clarity on the extent of liabilities from that case, combined with lower oil prices, could make it more vulnerable to a buyout. The industry hasn’t seen a mega-merger like that since the bust of the late 1990s.
Imagine two airplanes flying toward each other on a collision course. In the modern world of commercial aviation, two planes with conflicting flight paths would trigger alarms in in the air traffic control tower. That’s because the safety of commercial aviation relies on the use of real-time data to avert disasters. The same can’t be said for the offshore oil industry. Four and a half years after BP’s Macondo disaster in the Gulf of Mexico, the industry remains reluctant to use drilling data it collects from rigs to enhance safety.
Kevin Lacy is still haunted by the Deepwater Horizon disaster -- by the lives lost, the families devastated and the environment despoiled. He describes the images of the giant, burning rig as looking like “something from Pearl Harbor.”
For Bruce Misamore, $2.5billion just isn’t enough. Not after waiting a decade for justice. Not after his former boss was wrongly imprisoned in Siberia and 50,000 of his company’s former shareholders have yet to be made whole.
Loren Steffy, author of "Drowning in Oil: BP and the Reckless Pursuit of Profit", looks back at the safety lessons learned in the wake of the Macondo disaster
Like many people I covered in the business world, I thought “culture” was simply fodder for human resources seminars. Companies, after all, are complex organisations made of individuals.