Billionaire Harold Hamm, whose early adoption of shale drilling in North Dakota helped usher in a US energy renaissance, plans to cut spending by 41% at his company after the plunge in oil prices.
Continental Resources Inc. and other US producers can adjust quickly to the crude collapse and will be able to withstand the downturn better than many producing countries, which face economic “ruin,” Hamm said in an interview.
“The oil and gas industry has lowered the cost of gasoline to consumers in this country,” Hamm, chairman and chief executive officer of Continental, said yesterday.
Fears have been raised that an emergency summit on North Sea oil will “fall flat on its face”.
Aberdeen City Council Conservative group leader Ross Thomson yesterday voiced his “extreme disappointment” at the way Labour announced the event, with no details on its remit or venue.
He has e-mailed other group leaders on the council calling for an a commitment to constructive talks.
Oil traded near the highest price in almost two weeks as the US economy expanded at the fastest pace in more than a decade, signalling fuel demand may increase in the world’s biggest consumer.
West Texas Intermediate futures were down 0.6% in New York, paring a 3.4% gain yesterday.
Gross domestic product rose at a 5% annual rate from July through September, the most since 2003, according to revised Commerce Department data.
Oil traders are poised to cash in on low crude prices by storing vast quantities of the commodity until prices rise.
Global demand for supertankers is already growing as companies look to take advantage of the weakest oil prices in years.
The price of a barrel of Brent crude has plunged nearly 50% since June due to a global supply glut but the economics for storing crude at sea have until just recently remained unfavourable.
The boss of Danish conglomerate A.P. Moller-Maersk has warned the group’s oil division will have to close some sites and cut operating costs if oil prices remain at their current level.
Nils Smedegaard Andersen, chief executive, said that if prices stay around $60 per barrel, it will reduce revenue in the oil unit by one-third from the level of 2013.
He added: “As all costs, except taxes, are fixed it is obviously something we have to take very seriously. And we would have to do some things.”
Islamic State militants have returned to the outskirts of a strategic Iraqi oil refinery town after being driven out last month, officials said.
Raed Ibrahim, governor of Salahuddin province, said the militants had fought their way to the edge of Beiji after three days of heavy clashes. He added that they were able to advance because Iraqi troops lack heavy weapons.
Iraq’s cabinet approved a smaller 2015 spending plan than the government expected because of the collapse in oil, which provides most government revenue.
The budget, based on a $60 a barrel price for oil, stands at 123 trillion dinars ($103 billion), Saad Al-Hadithi, spokesman for the office of the prime minister, said.
The budget deficit was set at 23 trillion dinars and total revenue at 99.8 trillion dinars, including oil revenue of 84 trillion dinars, Obaid Mahal, deputy secretary general of the cabinet, said.
Russian energy company Gazprom said it was cutting expenses by more than $200million in an effort to streamline operations going forward.
The board of directors said it was cutting expenses by $238.7 million and expecting around $1.65 billion in foreign loans.
The Russian Central Bank last week raised its key interest rate by 6.5% to 17% in an effort to arrest the decline of the nation's currency.
Low world oil prices may not be such good news for airlines after all, according to aviation analysts.
Airlines’ fuel bills are falling, but the low prices could signal a downturn in the global economy and consequently could lead to less demand for air travel, said aviation data analysts OAG.
So 2015 could be “a challenging year for aviation” OAG’s executive vice president John Grant said.
Lundin Petroleum has come up dry on a wildcat well at the Storm prospect in the North Sea.
The company said it encountered hydrocarbons in the Cretaceous and Jurrasic reservoir sequences but not in “commercial quantities”.
The wildcat well 33/2-1 on PL555 is located 200km north west of Floro on the Norwegian west coast and 65km from the Snorre field.
The force defending oil ports in eastern Libya pushed back an onslaught that Islamist militias had started 11 days ago to capture the facilities.
“We pushed them back and it’s we who are now attacking them,” Ali al-Hasy, a spokesman of the Petroleum Facilities Guard, said by phone from Es Sider, Libya’s largest oil port.
“The oil ports are safe and they suffered no damage. All the fighting took place well outside the ports.”
Once the details of the summit are announced, Aberdeenshire Council will make sure it is fully involved.
The oil and gas industry is incredibly important, not only to the North East economy, but to the economy of Scotland and the rest of the UK.
We have established good working relationships with the private sector over many years and understand the challenges facing the energy industry today.
The area benefits when oil prices are high, but this also brings challenges impacting on house prices and affecting the local recruitment market. It’s important that we consider the impact of falling oil prices, the likely effect on the economy and steps we can collectively take to support the industry.
BG Group has entered into a $460million agreement with GasLog Ltd to acquire two modern tri-fuel diesel electric LNG carriers.
The company will charter back the two vessels, the Methane Becki Anne and Methane Julia Louise for nine and 11 years respectively.
A spokesman said the transactions would provide BG Group with flexibility in managing its future fleet requirements, and as the ships are currently managed by GasLog, day to day operations will be largely unchanged.
APR Energy said the suspension of operations in Libya will have an effect on its financial performance for the year.
The company decided in November to temporarily suspend on going work in the North African country while it awaited final parliamentary ratification of the contract addendum signed by the customer and Ministry of Electricity in July.
It said revenues for the year are expected to be $490million, offset by $30million which has arisen from the planned disposal of two turbines in Uruguay.
Ithaca Energy has appointed a new chief operations officer.
Roy Buchan will take up his new role in January and his appointment follows the announcement John Woods will step down from his role as chief development officer.
Mr Buchan has more than 30 years’ experience in the oil and gas industry and has held many technical and senior management positions in the North Sea for Shell and BG Group.
The offshore union RMT welcomes the announcement of a North Sea oil summit by Aberdeen City Council. As a representative industry body there are a number of areas we feel need to be addressed in the current climate:
People - RMT has major concerns about the impact of cost-cutting across the sector. We are hearing from workers with several different operators (Total, Apache, Shell and others) that terms and conditions are to be slashed in an effort to reduce costs.
The most worrying element of these cuts are the proposed changes to working patterns which could see workers currently working 2-weeks on, 3-weeks off, being altered to either two-on, two-off or three-on, three-off. These changes if pushed through will see significant redundancies and a loss of experience and 'corporate memory'.
Score Group has unveiled plans to spend around £80million on new headquarters and other buildings in its home town of Peterhead.
But a further plunge in oil prices could kill off the project, the company’s owner has warned.
The proposals are at an early stage and no approach has been made to Aberdeenshire Council for planning approval.
The pre-Christmas rally for the FTSE 100 Index continued today despite the impact of lower oil prices on heavyweight energy stocks.
The price of Brent crude fell back to 60 US dollars a barrel amid signs that Saudi Arabia is focused on maintaining its market share rather than cutting back production.
Exploration firm BG Group was the biggest faller in the top flight, with a decline of 2% or 15.9p to 870.2p. Tullow Oil was off 0.8p at 406.2p.
Oil workers have been evacuated from a North Sea rig after a power outage.
Operator Marathon Oil said all non-essential personnel on the Brae Alpha and Bravo rigs were transferred yesterday.
The field is located 155 miles north-east of Aberdeen.
Morgan Stanley’s failure to complete the sale of its oil storage, trading and transport unit shows the chilling effect US sanctions are having on Russian companies including OAO Rosneft.
The US bank and Rosneft, the Russian state-owned oil giant, said Monday that their deal, for an undisclosed amount, had expired after the companies failed to win regulatory approval.
Morgan Stanley had warned in October that the agreement might not be completed.
As Leader of Aberdeen City Council I felt it was important to try and take a lead on how politicians interact with the Oil and Gas Industry.
Aberdeen is a global city that has achieved so much success thanks to the Oil and Gas industry being on our doorstep.
It concern us all that the price of oil has dropped so heavily in such a short space of time and whilst we accept there will always be fluctuations in the price of oil I believe the time is now right for the industry and governments at all levels to work together to maintain confidence in the North Sea.
Aberdeen firm Craig Group said ongoing investment in tonnage and new international bases helped drive a big jump in both profits and turnover during the year to April 30.
The privately owned, family-run shipping and energy service company has just filed accounts showing pre-tax profits increased to £20.5million, from £17.3million, while turnover grew by more than £30million to £177.7million.
They also highlight almost £30million of capital expenditure during the year, of which £23.3million was spent on the continued modernisation of the group’s growing fleet of emergency response and rescue vessels.
At a difficult time for the oil and gas industry when we are addressing a range of challenges including the rapid, steep drop in oil price, we can fully appreciate why Aberdeen City Council has called for an oil and gas summit.
We are well aware of the concerns across the region regarding jobs and the future for businesses in the area and recognise that a summit, which involves the participation of such a wide cross-section of politicians, industry representatives, and trade unions, will focus minds and join effort on what needs to be done to sustain Aberdeen's position as the oil capital of Europe.
We welcome this positive and collaborative approach, but it is also important to acknowledge the truly constructive work being undertaken by the industry and the Government on a number of fronts to help secure the next phase of development on the UK continental shelf (UKCS).
The SNP has been accused of “deceiving” voters in September’s referendum after analysis suggested an independent Scotland would have received only a fifth of the party’s oil revenue estimates.
According to reports projections from the Office for Budget Responsibility (OBR) which take into account plummeting prices put oil revenues at £1.25 billion in 2016/17 - the first year of independence had Scotland voted Yes - instead of the £6.9 billion predicted by the Nationalists during the campaign.
Meanwhile oil giant Shell confirmed it is to sell its share in the Sean gas field in the southern North Sea.
BP and SOCAR (The State Oil Company of the Republic of Azerbaijan) have signed a new production sharing agreement to explore shallow water prospects in the Absheron Peninsula.
The agreement is part of the government’s plan to ensure that all of Azerbaijan’s offshore areas are fully explored.
A deal was signed by Rovnag Abdullayev, president of SOCAR, on behalf of the government of the Republic of Azerbaijan, and Gordon Birrell, BP’s regional president for Azerbaijan, Georgia and Turkey.
Mr Birrell said: “BP is proud to embark on this new era of exploration in the Caspian together with SOCAR.
