The market capitalisation of Scotland’s oil and gas companies listed on the Alternative Investment Market (Aim) fell by 31.9% to £373.5million as the sector was hit badly by the falling oil price during 2014.
A report by accountants and business advisers BDO – entitled Drilling Down: an Overview of Performance and Prospects of AIM Oil and Gas Companies in 2014 – found that the UK sector market capitalisation fell by 44% in 2014 to £4.9billion.
In Scotland there are four AIM-listed oil and gas companies accounting for 14.8% of the total number but constituting 36.2% of total market capitalisation.
Dragon Oil Plc, a Dubai-based explorer active in Turkmenistan, said its largest investor has made an offer to buy the shares it doesn’t already own.
Emirates National Oil Co., owner of 53% of Dragon, has offered to buy the remaining shares “for a premium” to its 509.5 pence closing price on March 13, the state-owned refining company said in a statement.
One of the largest offshore trade unions has announced it is to ballot members on possible strike action amid an ongoing dispute over terms and conditions in the North Sea.
The Rail Maritime and Transport (RMT) union, which represents about 5,000 workers, said it is planning a "rolling programme" of action designed to have the "maximum effect" on operations.
The RMT, along with Unite and the GMB, has railed against what it is describes as an "unprecedented assault" on the workforce during a downturn in the industry.
Buzzard operator Nexen has announced it plans to cut its North Sea workforce by 50 roles in response to the downturn in oil prices.
The firm, owned by Chinese oil explorer CNOOC, will cut a further 350 jobs in its North American business where it has interests in the Alberta oil sands.
The firm, which has offices the Prime Four business park at Westhills, said its Nexen UK business has initiated a consultation process to “adjust its staffing levels by approximately 50 employees”.
The operator of Scotland’s largest petrochemical plant at Grangemouth has started a community consultation process in a bid to gain support for fracking.
Ineos said its information programme will give the public the facts about shale gas extraction while highlighting both the issues and benefits.
The development of unconventional gas extraction has been halted by a Scottish Government moratorium while further research and a public consultation is carried out.
Sound Oil has gained approval of its Environmental Impact Assessment (EIA) for the Badile exploration well in Italy.
The drilling authorisation from the Italian Ministry of Economic Development is expected to follow with the endorsement of the Lombardy Region.
The approval of the European and Mediterranean focused oil and gas company’s application will allow it to prepare for the forthcoming exploration well.
Shell is looking for a buyer for its Frederica Refinery in Denmark.
The oil major has also agreed to sell both its retail and commercial fuel marketing operations in Denmark to Couche-Tard.
The oil price slump has hit the UK’s energy industry harder than almost anywhere else. Already beset by sky-high costs, rapidly depleting fields and uncertainty about who pays to decommission old platforms, investment in the North Sea threatens to collapse as oil trades near $50 a barrel.
The industry is expecting Chancellor of the Exchequer George Osborne to help with tax cuts on Wednesday when he delivers the government’s last budget before May’s general election. The group that represents oil and gas companies wants the tax on profits cut and a simpler and more generous tax break for investment.
“Tax changes are vital,” Malcolm Webb, chief executive officer of lobby group Oil & Gas UK, said in a statement on Monday. Action “is urgently needed in order to help re-establish the competitiveness of the UK oil and gas industry.”
Lundin Petroleum's Gemini exploration well has been completed as a dry hole.
The well was drilled about 10km southwest of the Edvard Greig field in central part of the North Sea.
The Swedish independent explorer had been targeting the well to prove petroleum in the Lower Paleocene Ty formation reservoir rocks.
A submersible drilling unit which drifted towards a liquefied natural gas (LNG) plant has been moved away from the infrastructure.
Woodside Petroleum temporarily shut down its $15billion plan after the Atwood Osprey rig drifted near to its flowlines.
The move was made after the rig, which had been drilling at Chevron's Wheatstone LNG project, was torn from its moorings in a cyclone.
The FTSE 100 Index has maintained its progress amid expectations that policymakers will continue efforts to support global growth.
London’s top flight slumped 2.5% last week but has recovered in the past two sessions on hopes that the US Federal Reserve will signal it is no hurry to increase interest rates.
Workers fired from US shale fields after the collapse in oil prices could soon have a new boss: the nation some blame for driving that decline.
The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads online aiming to snap up experts in extracting oil from shale as the country seeks to become a leader in that rapidly expanding effort.
Tens of thousands of US workers have been fired since November as oil prices plunged because of oversupplies, driven in part by an OPEC decision supported by Saudi Arabia.
That’s now giving Saudi Aramco a better chance to lure experienced workers to its own shale formations. Difficult living conditions had previously made the country a hard sell, said Tobias Read, chief executive officer of Swift Worldwide Resources, a recruiting firm.
US stocks bounced back yesterday after losing ground for three weeks as the dollar’s rally against the euro abated.
Elsewhere in financial markets, oil closed at a six-year low, below $44 a barrel, as supplies continue to outpace demand. Treasurys gained after some mixed reports on the economy.
The stock market has stumbled in recent weeks as the dollar has surged against the euro. The US currency has been rising on expectations that the Federal Reserve will start to raise interest rates even as the European Central Bank continues to provide stimulus to that region’s economy.
A stronger dollar is a problem for big US companies that rely on overseas sales because it makes their goods more expensive in foreign markets and reduces the value of the profits they bring back home to the US.
Scotland’s oil and gas industry is going on a trade mission to Africa this week in answer to a call for support from a former president of Mozambique.
The east African nation and its neighbour Tanzania have some of the largest offshore gas fields in the world, but with no local supply chain and a lack of skilled workers, they are ill-equipped to recover the hydrocarbons.
Operators in East Africa, including Anadarko, ENI, BG, Shell and Petrobras, are prepared to step in and spend about £1.35billion on developing the fields, believed to contain 150trillion cubic feet of gas.
Against the backdrop of an oil price which has halved in the past year; where investment in the UKCS is forecast to fall dramatically over the next 2 years; and where exploration activity is at a worryingly low level, the pressure on the Chancellor has been mounting for the past few months.
In the Autumn Statement the reduction in supplementary charge of 2% fell far short of industry hopes. However, the comments by Danny Alexander, Chief Secretary to the Treasury, the following day were more encouraging, signalling a fundamental change in policy for UK oil and gas exploitation.
No longer is the focus to be on raising tax revenues but rather on the macro economic benefits of maximising the hydrocarbons extracted from the UKCS. The Budget tomorrow represents the first opportunity for the government to put this new policy into action.
The UK has been told to host an international summit that would draw-up a “visionary” new strategy to safeguard the future of the North Sea.
A report by a group of peers has today called for a “step-change” in the management of the sea, including the creation of common policies on the environment, shipping, fishing and energy.
The House of Lords’ European Union committee made the recommendations after holding an inquiry that was launched last July.
A three-pronged approach comprising tax incentives and cuts as well as industry cost reduction could increase North Sea production by as much as 3 billion barrels of oil by 2050, a new report has shown.
The research paper, by leading petro-economist Professor Alex Kemp and Linda Stephen, also showed how a combination of tax cuts and incentives, plus a 15% cut in industry costs, would see firms invest a further £22billion in field development as well as spend a further £23.4billion in operating costs than if things stayed as they were today.
Professor Kemp and his associate worked out a range of scenarios affecting North Sea economics ahead of tomorrow’s budget, which is expected to provide some relief for beleaguered oil and gas producers.
Oxford University refused to divest its 2 billion-pound ($3 billion) endowment from fossil fuel companies, though it left open the possibility of future action.
By deciding to forgo action for now, Oxford joined Harvard and Yale universities, which control the biggest endowments in the US, in sidestepping requests to remove oil and coal companies from their investment funds.
About 200 institutions worldwide have pledged to scale back investments in polluting industries, including Glasgow University in Scotland and Stanford University in California.
Oil workers have been evacuated from a North Sea platform after a supply vessel crashed into it.
Production on the Apache-operated Forties Echo was also shut down following the incident at around 8.40am yesterday.
An Apache spokesman said 15 personnel were flown by helicopter to the nearby Forties Bravo as a precaution.
A further 15 workers remain on board the stricken platform.
There were no injuries as a result of the collision and no hydrocarbons leaked into the sea.
Global crude consumption is strengthening, and prices will stiffen as demand matches supply, a senior adviser to Saudi Arabia’s oil minister said.
Prices have stopped falling at about $60 a barrel as expanding demand helps contain the global glut, Ibrahim Al-Muhanna said at a conference in Doha, Qatar. It’s too early to say if the Organization of Petroleum Exporting Countries, which kept output unchanged in November, will alter policy when it gathers again on June 5, he said.
“I am confident that demand is and will be stronger,” said Al-Muhanna, adviser to Saudi Oil Minister Ali Al-Naimi. “Supply will remain healthy, and the price will firm up.”
This week’s Budget is “the most important” in terms of the future of the North Sea oil and gas industry, according to a leading figure in the sector.
Sir Ian Wood called for “really significant” action from Chancellor George Osborne to address a lack of confidence in the region and protect jobs.
Describing Wednesday’s Budget as a watershed moment, he said: “Unless we get this right we will lose a huge amount to the UK economy and the UK will be the loser.”
Sir Ian is the founder of the Wood Group and he has conducted a review of offshore oil and gas recovery for the UK Government.
Total has spudded exploration well 25/6-55 in the Norwegian North Sea.
The well, named Shango, is in licence PL 627 in the northern part of the Utsira High around five kilometres from the Skirne field.
Following the slide in oil price, which commenced in earnest in July 2014 and by 31 December had fallen by more than 40% in 6 months, alarm signals have been sounding loud and clear throughout the sector.
Collectively industry drew a deep breath on the 1 January 2015 as it pondered what the year would bring. Could the price go lower than the $57 recorded on the 31 December and how soon would the price rebound?
Well the answer to the first question has been yes, to just over $45 on January 13, and the answer to the second is anyone's guess but looks increasingly like a slow recovery with many predicting an average Brent price of $75 for 2016.
DALLAS — Amid all the pessimism surrounding the plunge in oil prices since mid-2014 and the havoc it has unleashed on the industry, there’s a sense of calm in the sprawling conference room just north of downtown Dallas.
I’m sitting next to the legendary Texas oilman T. Boone Pickens, who doesn’t seem worried at all.
Ask Pickens what’s going to happen with oil prices, and rattles off an optimistic scenario: The US rig count will drop to somewhere between 750 and 1,000 working rigs (currently, it’s at a five-year low of 1,192). Then, the market will balance off U.S. production and West Texas Intermediate crude will return to about $70 a barrel by year’s end.
Dubai stocks declined to the weakest level since January as Brent crude extended its slide on speculation that record U.S. supply may start to strain the country’s storage capacity.
The DFM General Index retreated 1.4% to 3,563.95 at 12: 22 p.m. local time, the lowest since January 7. The index has decreased 3.9% in two days, dragging its 14-day relative strength index to 27, the weakest in three months, from 38 on Thursday.
A Level below 30 indicates to some analyst the equities have fallen too far.
