Australian energy company Santos has cut its capital expenditure for 2015 by 25%. The company said there will be a drop in spending from $2.7billion to $2billion. However managing director, David Knox, has insisted the company’s financial position remains strong.
Wood Group PSN has been awarded a five year contract from BP worth an estimated $750million. The contract will deliver engineering, procurement and construction services to six UKCS offshore upstream assets and the FPS (Forties Pipeline System) onshore midstream facilities in Grangemouth. The contract win will create 150 new jobs and secure more than 700 existing positions.
Investing in new plant has paid off for Saltire Energy after the oil drilling equipment rental firm posted a 10% rise in revenues. Accounts filed at Companies House showed that the Portlethen-based company turned over £36.3million in the year to 30 June, up from just under £33million in the previous 12 months. Pre-tax profits edged up by 3% to £17.7million after a rise in the costs of distribution and sales, including the investment in new rental gear. Writing in the directors’ report, chief executive Mike Loggie said: “The group’s rentals have continued to show considerable growth.
Turnover at Enermech broke through the £200-million barrier for the first time last year and is on course to hit £260million this year after the mechanical engineering group unveiled a further six crane contracts together worth more than £34million. Figures published yesterday showed that revenues grew by 40% during 2013 to reach £202.5m. International expansion reined in earnings before interest, tax, depreciation and amortisation (Ebitda), which climbed by a more-modest 21% to hit £14.2m.
Marine-technology company Nautronix more than doubled its profits last year following a number of contracts wins and the launch of new technologies. The Dyce-based firm said sales of its new £1million NASDive diving communication system grew 53% in the first year of its launch. The company said it expects the technology, which is so advanced that divers can Skype call their family from beneath the ocean, will be bought by firms replacing their older diver communications systems as well as new customers.
A fresh slide in the price of oil piled more pressure on investors today after £36 billion was wiped from blue-chip shares in the previous session. Brent crude stood at just over 64 US dollars a barrel - a drop of more than 40% on earlier in the year - after a monthly report by industry cartel Opec said demand next year was expected to fall to its lowest level in a decade. The FTSE 100 Index, which slid 2% on Tuesday, had been in positive territory for much of the session but the oil slump meant the top flight finished 29.4 points lower at 6500 - its lowest level since the start of last month.
Britain’s trade deficit narrowed by more than expected in October after the falling price of oil helped to trigger a drop in the value of imports. The deficit in goods and services narrowed to a seven-month low of £2 billion from £2.8 billion in September and better than City forecasts for £2.4 billion. The improvement in the figures from the Office for National Statistics (ONS) was largely driven by a fall in the value of oil imports following the recent drop in the price of Brent crude to well below 100 US dollars a barrel.
Brent crude oil fell to another 5-year low near $65 a barrel in volatile trade yesterday, sliding for a sixth consecutive session on signs of a growing supply glut. Prices briefly reversed losses to trade higher ahead of the US open, with some investors betting the 40%-plus price slide since June was overdone. But as US equity markets opened lower oil prices quickly came off again, with traders refocusing on how fast-growing US shale output has hurt the ability of Opec to manage supply.
Oil major BP said it expects to incur restructuring charges of $1billion over the next five quarters. The company will present its future strategy to investors in London following an announcement earlier this week that job cuts would be made. Chief executive of BP Upstream, Lamar McKay, and a senior members of the management team are set to outline its changing position on the back of falling oil prices.
As oil prices keep falling, BP is among Norwegian oil producers having to take a hard look at whether to kill off aging offshore fields earlier than planned because squeezing out the last barrels might not be worth it. BP is currently deciding on plans for the five fields it operates in Norway in a study to be completed in the first half, said Jan Erik Geirmo, a Stavanger-based spokesman. “Falling oil prices, lower production and more demanding operations, in addition to significant costs for shutting down and removing old installations and platforms, are continuous challenges that may have an impact on the lifetime of some of our fields,” Geirmo said in an e-mailed reply to questions. What goes for BP also goes for an industry hit by squeezed margins even as the government demands it meet commitments to keep investing to ensure resources are exploited in full.
BP shares were down 2% as investors reacted to the company's failure to win a US Supreme Court battle over oil spill compensation claims. The price of Brent crude fell to $66 a barrel due to oversupply fears.
Total has entered into an agreement for the sale of its remaining stake in GTT (Gaztransport and Technigaz) to Temasek. The sale, which was netted the French company more than $650million, follows an initial transaction in February this year. The company said it initially reduced its shareholding from 30% to 10.4%.
Brent and West Texas Intermediate fell to a five-year low as Iraq followed Saudi Arabia in cutting prices for crude sales to Asia, adding to signs that OPEC’s biggest members are defending market share. Futures dropped as much as 1.3%t in London to the weakest intraday price since September 2009. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, reduced its Basrah Light crude to the lowest in at least 11 years, a price list for January showed.
Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of state-run Kuwait Petroleum Corp. Oil is trading in a bear market as the US pumps at the fastest rate in more than three decades and global demand expands more slowly. OPEC decided on November 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010. “I think oil prices will stay around the current level of $65 for six or seven months until OPEC changes its production policy, or recovery in world economic growth become more clear, or a geopolitical tension arises,” Nizar Al-Adsani, KPC’s chief executive officer, said at a conference in Kuwait City.
Oil major ConocoPhillips has cut its capital budget for 2015 by 20%, the company said. The reduction, to a CAPEX of $13.5billion, has been influenced by relatively lower spending on major projects as well as the deferral of spending on US shale. Ryan Lance, chief executive, said: "We are setting our 2015 capital budget at a level that we believe is prudent given the current environment.
Fears over Chinese demand combined with another decline in oil prices to trigger a poor start to the week for European markets. A slump in export growth in the world’s second largest economy spooked investors, particularly as imports also contracted rather than expanded.
Enegi Oil has agreed to end a farm-in agreement with BSE (Black Spruce Exploration) in Canada. The company said it the decision had been taken in recognition of the “problems” in completing investment for large-scale plans in the current climate. It said the termination of the agreement would also allow for faster results and appropriate regional development in plays such as western Newfoundland.
Oil and gas services firm Can Group has recorded a boost in turnover and pre-tax profits for the year ending December 2013. The Aberdeen-headquartered firm, which provides engineering, inspection and trade services to the oil and gas sector, posted a 20% increase in pre-tax profits to £18.5million, from £15.4million previously.
Global oil and gas exploration projects worth more than £95billion are likely to be put on hold next year as plunging oil prices render them uneconomic, new figures show. The shelving of developments around the world could put a severe constraint on supplies by the end of the decade, it is feared. As big oil fields that were discovered decades ago begin to deplete oil companies are trying to access more complex and hard-to-reach fields, which in some cases are deep under sea level.
For over 20 years I have analysed oil price fluctuations. Why? Well, every country’s economic prospects and people’s jobs, yours and mine, are affected in one way or another by what happens to oil prices. Life and death decisions, including continuing national sovereignty for some nations, hinge on the price of oil. The current dramatic and fast 35% fall in oil price could be a pivotal moment in historical events. For example, will the oil revenue dependent Russian economy survive if oil prices stay at around $70 a barrel? If not, what action will Russia take?
Oil & Gas UK chief executive Malcolm Webb sat down with the Chief Secretary to the Treasury, Danny Alexander in an exclusive interview for Energy Voice. The minister sets out the plans by the government including the introduction of new tax breaks to trigger a fresh wave of North Sea exploration.
As a result of lower prices and rising cost the oil and gas industry has been lobbying hard for improvements to the oil and gas fiscal regime and will have been watching the Autumn Statement closely for positive reforms. Whilst some announcements were made, further consultation will take place before the package is agreed. It is not clear whether this will happen ahead of next year’s general election. Further details were announced by the Rt Hon Danny Alexander MP in Aberdeen on Thursday.
Offshore industry chiefs have urged the UK Government to speed up measures to support the sector after coalition ministers unveiled radical plans to reward North Sea investment. Tax regime changes aimed at making sure as much oil and gas as possible is extracted have been welcomed by operators. But they want them implemented sooner rather than later because of the challenges posed by low crude prices and high exploration costs. Highland MP and Chief Secretary to the Treasury Danny Alexander, and Exchequer Secretary to the Treasury Priti Patel, were both in Aberdeen yesterday to present their department’s financial review of the sector.
The UK Government has unveiled a radical plan aimed at rewarding investment in the North Sea in a bid to see as much oil and gas extracted as possible. A review of the fiscal regime for the oil and gas sector was announced in this year’s Budget, with a new Treasury report saying “significant change” was needed in order to continue to attract investment. Chief Secretary to the Treasury Danny Alexander launched the new report as he met key industry figures during a visit to Aberdeen. There is still “significant hydrocarbon reserve” in the UK Continental Shelf (UKCS), the Government said, which could “generate significant benefits for the UK” if it can be recovered.
The head of oil and gas for professional services firm EY said the government has taken a "crucial step" towards protecting the longevity of the UK's oil and gas industry. Derek Leith said the recommendations were also in line with what had been set out in the Wood Review. The Chief Secretary to the Treasury, Danny Alexander, was in Aberdeen to outline three principles which will underline the future of oil and gas fiscal policy, as well as a new set of proposals. Mr Leith's comments come after he spoke to Energy Voice yesterday to give his initial reaction to the Chancellor's Autumn Statement.