The events of 2014 have demonstrated just how quickly political and economic risks can escalate and shift into large-scale crises, even in historically stable countries.
As we move into 2015, the biggest sources of uncertainty for many energy firms will be volatile commodity prices and political risk. That’s reflected in our Political Risk Map, produced with Business Monitor International (BMI), which details overall risk scores for 185 countries based on three categories: political, macroeconomic, and operational risk.
Falling oil prices will undoubtedly be the biggest concern for oil and gas companies. In the last five months, we’ve seen the price of Brent Crude drop from more than $100 boe to around $60, a reduction of more than 40%.
A leaked letter has revealed the Government’s behind-the-scenes efforts to get fracking off the ground as MPs call for a moratorium on the controversial process.
The letter from Chancellor George Osborne, written last year, called on Cabinet colleagues to “make it a personal priority” to implement measures to help boost the shale industry.
He called for rapid progress on developing three or four “exemplar drilling sites” to prove the concept of safe shale gas exploration, contingency plans if Lancashire County Council turns down planning applications and a strategy to push fracking to the public.
The US onshore rig count has continued a steady decline according to research by the Gaffney, Cline and Associates (GCA) oil and gas monitor.
It was launched earlier this month to track onshore and Gulf of Mexico (GOM) activity it the wake of lower oil prices.
The Baker Hughes rig count showed a fall of a further 43 over the past week in the US onshore total, with this now having declined by 297 from a high of 1,876 in November last year down to 1,579 this month.
LGO Energy has completed perforation of the GY-669 well at the Goudron field in Trinidad.
The well is not flowing at a stabilised, but highly restricted rate, of 365 barrels of oil per day (bopd).
The company said over the last 48 hours the well has flowed at an average rate of 445 bopd.
President Barack Obama will call on the US congress to expand protection of Alaska’s Arctic refuge to 12million acres.
The move will prohibit oil and gas drilling in a region with more than one million acres of oil heavy coast.
The proposal was unveiled by the Interior Department at the weekend.
The chief executive of Apache will collect $11.9million in salary and bonus as part of his retirement package.
Steve Farris, who announced his retirement last week, will continue in a consulting role with the company.
During this period he will collect his $1.75million salary as well as two bonus payments of $2.6million and a lump sum of $1.4million.
OAO Rosneft will place 400 billion rubles ($6.1 billion) in ruble bonds today as Russia’s largest oil producer plans to repay loans raised for deals and growth.
Rosneft completed collecting bids for the sale in 1 hour on January 23 and set the coupon at 11.9%, the Moscow-based company said in a statement.
Russian government bonds due in June this year yield 14.65%, according to data compiled.
A moratorium on fracking is needed amid concerns over local environmental risks and climate change, a committee of MPs has demanded.
The cross-party Environmental Audit Committee (EAC) warned extensive production of unconventional shale gas, which is extracted through the controversial process of fracking, is not compatible with the UK’s goals to cut greenhouse gas emissions.
The committee also called for fracking to be “prohibited outright” in protected areas such as national parks, areas of outstanding natural beauty and ancient woodlands, and banned in all water source protection zones, which feed drinking water aquifers.
Antrim’s discovery of a “proxy tabulation error” sent a shiver down the spine of those of us who attend corporate meetings. Resolutions are easier to calculate than oil reserves, but it’s still no game for amateurs.
Antrim Energy’s shareholders thought they had resolved to appoint a chairman in December.
By Hogmanay the person they thought they had in place had been invited to “resign” due to what was referred to as a “proxy calculation error”. Instead of receiving the reported nearly 80% of the vote he actually received nearer 21%. Unlike for oil reserves, reporting resolutions is not supposed to be a “probable” against “possible” exercise.
A conference has been called in Aberdeen to offer advice to oil and gas contractors as North Sea firms begin cutting thousands of jobs and rates are also reduced.
Hundreds of people are already out of work as major energy firms react to the Brent crude slump.
Last week, Talisman Sinopec said 300 jobs from its North Sea operations are to go, including 200 contractors. Schlumberger and BP have also revealed plans to axe hundreds of north-east jobs.
Aberdeen Central SNP MSP Kevin Stewart has claimed politicians who supported amendments to a controversial piece of Westminster legislation are guilty of a “complete
betrayal of oil workers across the north-east”.
Scottish Labour MPs Mark Lazarowicz and Katy Clark and Scottish Liberal Democrat MP Alan Reid all put their names behind the changes to the Infrastructure Bill, which will be debated today.
Members of Westminster’s environmental audit committee tabled an amendment calling for the removal of a section, which would enshrine in law “the objective of maximising the economic recovery of UK petroleum”.
Oil fell to the lowest level in almost six years as signs that Saudi Arabia’s new king will maintain its production policy and rising US crude stockpiles bolstered speculation that a global glut will persist.
Futures dropped as much as 2.7% in New York, extending a 6.4% slide last week. King Salman Bin Abdulaziz, who took over after the death of King Abdullah on January 23, pledged to maintain the policies of his predecessor in a speech on Saudi national television.
US inventories climbed to 383.5 million barrels last month, the highest level for December since 1930, the American Petroleum Institute reported.
Battle lines have been drawn between North Sea firms and thousands of workers over plans to shake-up shift patterns.
American firms Apache and Marathon have both unveiled proposals to replace “two weeks on, two/three weeks off” rotations with “three weeks on, three weeks off” (3:3).
The move was revealed after operators and contractors including BP and Talisman Sinopec announced plans to make hundreds of redundancies in recent weeks.
BG Group has become the latest firm to cut its contractor rates in the wake of the fall off in oil prices.
A staff meeting was held Friday in Aberdeen where people were informed of the priorities for the year, the need to improve efficiency and the decision to reduce contractor rates by an average of 10%.
BG employs 230 contractors in Aberdeen.
Oil fell to the lowest in almost six years on speculation the death of King Abdullah of Saudi Arabia won’t signal any change in strategy for the world’s largest crude exporter.
US benchmark oil futures slid 1.6%t, reversing an initial gain of as much as 3.1%.
Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies.
A group of MPs has been accused of putting thousands of jobs and the entire UK oil and gas industry in "peril" after launching a bid to derail crucial North Sea reforms.
The 10 politicians were branded "ill-informed" after attempting scupper a "crucial" measure recommended last year by Sir Ian Wood in his landmark review.
On Monday, MPs will discuss the Infrastructure Bill for the final time, including a section which would enshrine in law "the objective of maximising the economic recovery of UK petroleum".
American engineering group SPX is aiming to grab a slice of the North Sea pump repair market after opening its first service centre in Aberdeen.
The North Carolina-based company is understood to have pumped a seven-figure sum into the launch of the facility, which will service its own Bran & Luebbe, ClydeUnion and Plenty Mirrlees brands as well as third-party pumps.
SPX yesterday unveiled details of the service centre in the ABZ Business Park, which will test equipment and provide spare parts.
Fire protection company Blaze Manufacturing Solutions is poised to increase both revenues and staff by more than 20% this year 2015 after securing a string of deals worth a total of £2million.
Contracts won by the Laurencekirk-based firm, which supplies fire protection systems to oil and gas operators, include a chemical cleaning services deal worth around £1million.
Blaze – which lists Amec, Petrofac, Taqa and Wood Group among its clients – secured a pair of multi-million pound contracts last year, [2013-14] which boosted turnover to £18.25million.
A Super Puma has made an emergency landing at Aberdeen International Airport.
The CHC Super Puma L2 helicopter had two crew on board and no passengers when the incident happened.
The flight had been coming into Aberdeen when it made a request for priority landing.
The Canadian Association of Oilwell Drilling Contractors (CAODC) said there could be up to 23,000 jobs losses this year.
CAODC has anticipated that the lower price of oil and natural gas will adversely affect the number of active drilling rigs in service, resulting in an industry-wide slowdown and employment losses.
Last year, it originally issued its 2015 drilling forecast with an assumption of oil at $85 per barrel.
BP Plc (BP/) may get 200 million to 400 million euros ($456 million) for a Dutch oil-storage terminal it plans to sell, according to an analyst at ING Groep NV.
Europe’s third-largest oil company, seeking to sell assets and cut jobs amid falling oil prices, plans to sell the terminal with a capacity of 950,000 cubic meters, London-based BP said.
“It is in the long term interests of the Amsterdam Terminal and its staff for it to be owned by an entity which is better placed to invest in its future,” Hendrik Muilerman, BP’s Netherlands managing director, said.
Jericho Oil has expanded into Oklahoma after signing a Letter of Intent (LOI) to acquire a 50% interest in the North of the state.
The company will begin build-out of its second platform, which is focused on developing and optimising legacy productive basins, upon closure of the deal.
The acquisition of the 2,050 acres will bring the company’s total acreage in the region to more than 5,800 acres.
The increase in oil prices after the death of Saudi Arabia’s King Abdullah will probably be temporary amid an oversupply in the crude market.
Brent, the global oil benchmark, climbed as much as 2.6% on Friday while US marker West Texas Intermediate jumped 3.1% after the king’s death was announced by the Saudi royal court.
The new King Salman bin Abdulaziz, Abdullah’s half-brother, said he will maintain the policies of his predecessor in a speech on Saudi national television.
Oil Minister Ali Al-Naimi will remain in his post, a royal decree announced.
Royal Dutch Shell will attempt to show that it is able to ride out the new era of low oil prices when it posts its full-year results on Thursday.
London-listed Shell, which employs 90,000 people in more than 70 countries, is expected to report full-year earnings up 5.4% to 17.6 billion US dollars (£11.6 billion), as it sells non-core assets and scraps projects following the oil price slump.
The moves fit in with the strategy of chief executive Ben van Beurden who took the helm a year ago this month and said he wanted the oil giant to improve operational performance and financial results.
This week's most read article on Energy Voice was the news that Shell's vice president would move onto a new role within the company.
In other news regarding Shell, the oil giant launched an investigation into a suspected gas leak in the North Sea.
