Italian oil firm Eni has warned oil could jump to as much as $200 per barrel if the Organisation of Petroleum Exporting Countries (OPEC) fail to cut production. The company said the oil price slide is leading to under investment within the oil industry. Claudio Descalzi, Eni’s chief executive, said mismanagement may lead to longer-term shortages and cause prices to soar several years’ time.
Faroe Petroleum has been awarded five exploration licenses on the Norwegian Continental Shelf. Three of the licenses are in the Norwegian Sea and two are in the Norwegian North Sea.
Oman, the biggest Middle Eastern oil producer that’s not a member of OPEC, joined Venezuela and Iran in questioning the group’s decision to keep its output target unchanged even with crude prices falling. Oman is having a “really difficult time” because of low oil prices, Oman’s Oil Minister Mohammed Al-Rumhy said at a conference in Kuwait City. Standard & Poor’s lowered the country’s outlook to negative from stable on December 5, citing a risk that oil may drop more than expected.
This will be a challenging year for the North Sea but the necessary austerity may create a new appetite for near-to-market technologies. The average cost of bringing oil to the surface globally is around $7 a barrel, in the North Sea the average is $28, and in some of our fields it is nearly four times that. As a result, the second half of 2014 was brutal to North Sea operators’ profit and loss accounts with 2015 offering no respite. Operators are prioritising cost efficiencies and reappraising capital programmes, while the supply chain is doing its bit as part of the industry belt tightening.
Energy Secretary Ed Davey has admitted that the world oil price collapse took him by "surprise" – but insisted the North Sea’s future was not all "doom and gloom". He also reassured MPs that the new Aberdeen-based Oil and Gas Authority remained on track to be up and running by April. The Liberal Democrat minister was giving evidence to Westminster’s energy and climate change committee.
An oil firm failed to approve 159 safety-critical work orders for deferral. The Health and Safety Executive (HSE) found 182 outstanding jobs when it carried out an inspection on the North Sea Clyde platform, 159 of which had not been approved for deferral. The company has since been issued with an improvement notice following the evaluation last year.
A resurgent FTSE 100 Index climbed for the fifth session in a row to reach a six-week high after a recovery in oil prices lifted energy stocks. Brent crude firmed at $49 a barrel, which lifted a range of oil and gas firms such as production and exploration giant BG Group. The FTSE 100 Index was 107.9 points higher at 6728 as the top flight extended its progress over the last week to more than 250 points.
Apache has confirmed the retirement of its chief executive. Steven Farris said he would step down from his role but continue as non-executive chairman of the board until May 1, 2015. Mr Farris joined the firm in 1988 and has served as its chief executive officer since 2002 and as chairman of the board since 2009.
Last week’s ruling that BP Plc (BP/)’s Macondo well dumped less oil into the Gulf of Mexico than the US government claimed may trigger a settlement before a decision on the amount it must pay after a trial set to begin this week. A federal judge determined on January 15 that the penalty will be based on the size of the spill being 3.19 million barrels, about 25% less than estimated by the government. That ruling, which was followed by a 5.3% jump in BP shares, reduced the potential maximum pollution fines for the 2010 spill to $13.7 billion from $18 billion and increased the incentives for a settlement.
A pioneering clean-energy project in Peterhead is “developing very well” and investment decisions will be taken this year, according to the UK energy secretary. Ed Davey defended the rate of progress at Britain’s two leading carbon capture and storage (CCS) in Aberdeen and Yorkshire. Shell plans for to fit CCS technology to Peterhead Power Station, enabling harmful emissions to be caught before the enter the atmosphere, and stored in the North Sea.
US oil and gas rig counts dropped to their lowest level in over four years, falling by an additional 74 units for the week ending on January 16. The lower count provides fresh evidence that low oil prices are forcing drillers to pare back operations and slash spending. While that may soon begin to cut into actual production figures, a new Wood Mackenzie report finds a lot of nuance in the oil patch, painting a complex picture of what to expect in 2015.
Genel Energy said it will be making job redundancies in a bid to reduce costs. The company said its capital expenditure guidance has been lowered for 2015 by 30% to between $200 and $250million. The move marks a reduction of 70% compared with expenditure last year. A spokesman for the company said: “Headcount reductions and other efficiency measures are expected to reduce administrative expenses by 40% year on year in 2015.”
Proposals for “fracking” for shale gas at two sites in Lancashire should be refused, planning officers have recommended. Lancashire County Council has published reports with recommendations on planning applications from shale company Cuadrilla to develop two new sites to explore for shale gas by drilling, fracking and testing the flow of gas. The council’s development control committee is due to make decisions next week on the planning applications for the two sites, at Preston New Road, near Little Plumpton, and Roseacre Wood, near Roseacre, both between Blackpool and Preston.
A resurgent FTSE 100 Index posted more gains today as investors geared up for Europe’s long-awaited effort to stimulate the region’s economy. The boost provided by the European Central Bank’s expected announcement tomorrow of a programme of quantitative easing came alongside a rally for oil stocks after Brent crude firmed at near to $49dollars a barrel.
BHP Billiton Ltd. (BHP), the biggest overseas investor in US shale, will cut the number of its rigs there by about 40% as plunging petroleum prices add to concerns about lower iron ore earnings. Drilling and development spending on US onshore oil and gas fell to $1.9 billion in the six months to December 31 from $2.1 billion a year ago, the Melbourne-based company said today in a statement. BHP will cut the number of active rigs to 16 from 26 by July, it said. Brent crude, a benchmark for more than half of the world’s oil, declined 48 percent last year as increasing output in the US contributed to a global glut.
Chevron has struck a deal with South Korean conglomerate SK Group to buy 4.15million tonnes of LNG over five years. The oil major has been looking to secure long-term contracts for its Australian liquefied natural gas. The deal will see the SK Group purchase the gas over a five year period from its Gorgon LNG project.
George Osborne has confirmed that he will deliver new North Sea tax cuts within weeks – but also signalled that he wants to ban Scots MPs from voting on the Budget. The chancellor said he was "sure" that there would be "further steps" to protect oil and gas jobs in the Budget on March 18. The pledge was made by the Conservative minister as he gave evidence to Westminster’s Treasury select committee yesterday.
Shadow Chancellor Ed Balls has insisted Labour will announce “detailed plans” to reform the tax regime for the North Sea if George Osborne does not act swiftly. The Labour MP would not be drawn on the specifics of any future policy yesterday, but argued that the Chancellor cannot afford to wait until the Budget in March to make changes to secure jobs and safeguard investment. Speaking in Aberdeen amid news of fresh lay-offs in the north-east, Mr Balls also argued the Scottish Government could be doing more to mitigate against the wider impact of the oil industry downturn.
Statoil has been awarded interest in 15 licences on the Norwegian Continental Shelf (NCS). The awards were given in the 23rd licensing round by the government, and include eight as operator. The Awards in Predefined Areas (APAs) include 80% ownership and operatorship in PL783 and 20% ownership in PL782S west of Balder, and 50% ownership in PL803 - a new licence in the Tromsø basin.
More than 150 investors including local authorities and the Church of England have filed a resolution calling on oil giant BP to assess and manage climate change risks. The shareholders, which include multibillion-pound pension funds, investors and insurers, have already filed an identical resolution to Shell. They are calling on the oil companies to transparently “stress-test” their business model against the commitment made by governments not to let global temperatures rise more than 2C above pre-industrial levels - the threshold above which “dangerous” climate change is expected.
As the oil price plummets to its lowest level in more than a decade, oil and gas industry bosses in the north-east are making cuts to curtail declining profits. We can’t avoid that reality. The energy sector is increasingly feeling the pinch and staff layoffs are inevitable as challenging times ensue over the next quarter and beyond. Redundancies in any company during a recession are tough. But in a cyclical market, it is important to try and make the process as pain-free as possible for those whose jobs could be at threat.
Fresh measures to shore up the Scottish oil industry in the wake of tumbling prices are set to be announced in the Budget, George Osborne has indicated. Analysis by the respected Institute for Fiscal Studies (IFS) that suggests an independent Scotland could have been up to £7 billion worse off as a result of falling oil revenue “reminds everyone of the risk of independence”, the Chancellor said. Mr Osborne lambasted predictions made by the SNP during the referendum campaign about the finances North Sea oil would generate for the nation as “wildly optimistic”.
Oil giants Baker Hughes and Halliburton are set to cut thousands of jobs. The company made 1,000 redundancies from its eastern hemisphere operations in the fourth quarter last year. The announcement comes after Talisman Sinopec said it would cut up to 300 jobs from its North Sea operations.
The Shadow Chancellor has called for changes to the UK Government's tax regime for the oil and gas industry.
Talisman Sinopec said 300 jobs from its North Sea operations are set to go. The company, which has around 3,000 staff in the North East of Scotland, said the losses include 100 employees and 200 contractors. The move follows companies including Schlumberger and BP who both announced last week they would cut a number of positions.