Total Share Discussion Threads

[the grumpy old men] 30/8/2016 15:41

KAMPALA Uganda--The U.K.'s Tullow Oil PLC (TLW.LN) and France's Total SA (TOT) have been issued eight oil production licenses in Uganda, as the East African nation seeks to develop vast oil reserves discovered a decade ago.

Tullow and Total are expected to invest $8 billion to develop the oil fields, which will involve drilling more than 500 oil wells, Irene Muloni, Uganda's energy and minerals minister, said Tuesday.

"Time for waiting is now over" Ms. Muloni said, adding that "oil companies are expected to make final investment decisions on these projects within 18 months and first oil is expected by 2020."

The development ends nearly six years of talks with oil companies. Uganda's oil assets are believed to contain some 6.5 billion barrels of crude.

Tullow will develop five oil fields, while Total with develop three, all located along Uganda's western border with Congo.

Adewale Feyami, general manager of Total's Ugandan unit, said that the company would dedicate financial and physical resources to fast track the development of the project.

"We are committed to ensure that first oil from this project is delivered as soon as possible," Mr. Feyami told reporters in Kampala.

After falling to multi-year lows over the past two years, oil prices have climbed more than 25% in 2016 on expectations that the global glut of crude is set to shrink. But the price turmoil has raised concerns among about frontier projects in Africa.

China's Cnooc Ltd., which jointly owns four oil blocks with Total and Tullow in Uganda was the first to be issued with a production license for the $2 billion Kingfisher oil field in 2013. First oil from this field was initially expected to come on stream in 2018, but this is now not expected until 2020.

The three companies are expected to start pumping as many as 230,000 barrels-a-day of crude for the issued licenses by 2020.

But according to Ahmed Salim, an analyst with Teneo Intelligence, Uganda's latest target remains "ambitious" in light of oil-price trends.

Total, Tullow and Cnooc said in a joint statement that the approvals are a milestone for Uganda and the companies.

"It now paves way for the Joint Venture Partners to make considerations for significant long-term capital and infrastructure investments in Uganda," the companies said.

East Africa has been a focus for oil and gas exploration after a flurry of discoveries in Uganda, Kenya and Tanzania in the past few years. Analysts say the region could rival West Africa as the next energy hub on the continent, given its close proximity to the energy-hungry Asian markets.

Uganda's long-delayed decision comes weeks after Kenya approved a plan to start oil production from oil fields in its remote north western regions.

The development of Uganda's oil assets will include building a 1,443 kilometers (897 miles) crude export pipeline to the Tanzanian port of Tanga. A 30,000 barrels-a-day refinery is also being built.

According to Tullow, Uganda's oil development costs including pipeline tariffs are estimated at $25 per barrel.



Write to Nicholas Bariyo at [e-mail]



(END) Dow Jones Newswires

August 30, 2016 08:17 ET (12:17 GMT)

[maywillow] 19/8/2016 19:13

Oil report | Fri Aug 19, 2016 6:03pm BST
U.S. oil drillers add rigs for eighth week in row -Baker Hughes

Aug 19 U.S. drillers this week added oil rigs for an eighth consecutive week, the longest recovery streak in the rig count in over two years, as crude prices rebounded toward the key $50-a-barrel mark that makes the return to the well pad viable.

Drillers added 10 oil rigs in week to Aug. 19, bringing the total rig count to 406, compared with 674 a year ago, energy services firm Baker Hughes Inc said on Friday. RIG-OL-USA-BHI.

The oil rig count has risen by 76 since the week ended July 1, the most weekly additions in a row since April 2014, after U.S. crude prices touched $50.

Energy companies kept adding rigs despite prices dipping below $40 earlier this month but analysts have revised down rig count growth forecasts.

Crude futures, however, have surged nearly $10 a barrel, or more than 20 percent, in just over two weeks on speculation that Saudi Arabia and other key members of the Organization of the Petroleum Exporting Countries will agree next month to a production freeze deal with non-OPEC members led by Russia.

On Friday, U.S. crude hovered at $48 a barrel, versus its 2016 peak of $51.67.

The two-month long hike in the rig count has reinforced worries of some analysts that higher oil prices could spur more output and undercut efforts to balance supply-demand in a glutted market.
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"The U.S. production factor has taken on a more bearish appearance as the oil rig counts have increased appreciably and weekly EIA (Energy Information Administration) production estimates have shown a surprising uptick," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

"We are maintaining a theme that the magnitude of the rig increases that have been primarily developing within the Permian will prove sufficient to force leveling into lower-48 output, with U.S. crude production likely to post an increase from next month into October."

(Reporting by Barani Krishnan; Editing by Marguerita Choy)

[grupo guitarlumber] 13/8/2016 19:31

JEUDI 22 SEPTEMBRE
- 08h45 Enquêtes de conjoncture de l'Insee / septembre

- Total TOTF.PA / journée investisseurs

[waldron] 12/8/2016 07:36

Total, Shell raise conditions for opening fuel retail sites in Iran
12 August 2016 08:23 (UTC+04:00)

6

Baku, Azerbaijan, Aug. 10

By Fatih Karimov – Trend:

Iran is negotiating with leading global oil companies to establish fuel retail stations in the country, Ardeshir Dadras, head of Iran’s CNG Station Owners Association, said.

Iran’s private sector investors are in talks with Shell, Total, BP and Lukoil on the issue, Dadras said, Mehr news agency reported Aug. 10.

Companies such as Shell and Total have put two preconditions for opening filling stations in Iran, including gasoline, diesel and CNG stations, he added.

The companies have requested 10 to 25 percent of incomes from fuel sales as one of the preconditions, Dadras said.

They have also asked that prices for gasoline, diesel and CNG be determined in line with floating system, he added.

Given the current prices and commissions, launching fuel retail stations in Iran by international companies is impossible at the moment, Dadras said.

Last October head of Iran’s filling stations union, Bijan Haj Mohammadreza said licenses had been issued for Shell and Total to establish 200 filling stations in Iran.

However, the National Iranian Oil Products Distribution Company (NIOPDC) later rejected the issue.

There are currently more than 3,200 filling stations in Iran offering services to motorists in the country of 80 million people, according to figures provided by the local media.

More than 15 million vehicles ply the country's roads as fuel prices in Iran are among the cheapest in the world even after the government cancelled offering oil products at subsidized prices last year.

[la forge] 10/8/2016 09:01

SunPower to Cut 15% of Workforce
09/08/2016 10:30pm
Dow Jones News

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Today : Wednesday 10 August 2016
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SunPower Corp. warned of near-term challenges in its power plant segment and said it will cut about 1,200 jobs, or 15% of its workforce, though the company said it had a strong quarter.

The maker of solar panels and systems said aggressive pricing by new market entrants has hurt near-term economic returns.

Meanwhile, the December 2015 extension of tax credits for renewable power, which helped shares of SunPower and other solar companies at the time, has "reduced the urgency to complete new solar projects by the end of 2016," the company said.

SunPower shares fell 10.2% to $13.27 in after-hours trading.

Write to Josh Beckerman at [e-mail]



(END) Dow Jones Newswires

August 09, 2016 17:15 ET (21:15 GMT)

[la forge] 04/8/2016 08:57

Iran's Cabinet Approves New Oil-Field Contracts to Woo Western Investors
03/08/2016 1:40pm
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Today : Thursday 4 August 2016
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Iran's government on Wednesday approved new oil-field contracts designed to attract Western oil investors following the lifting of sanctions in January, an oil-ministry spokeswoman said.

However, Iranian officials didn't disclose the terms of the new contracts, which have long been awaited by international oil companies that once worked there such as Total SA of France, Eni SpA of Italy and the Anglo-Dutch firm Royal Dutch Shell PLC.

The spokeswoman also said the terms of the new deals would still have to be approved by a parliamentary committee in charge of reconciling new legislation with old, and signed off by the assembly's speaker Ali Larijani.

The contracts have been at the center of a struggle between President Hassan Rouhani, a relative moderate in Iran, and conservative hard-liners opposed to foreign influence. Iran had been working to revamp the terms, even before Western sanctions over its nuclear program were lifted in January.

Mr. Rouhani's oil ministry proposed new contracts that would allow foreign oil companies to at least recoup their costs and last up to 20 years. The new deals were supposed to address concerns with the pre-sanctions contracts, called "buybacks," which included a fixed lump sum and, typically, a five-year deal.

After pressure from hard-liners in recent weeks, Iranian officials have said that the contracts for working in some parts of the country would continue to resemble the buyback deals of the past.

Mr. Rouhani's cabinet approved an amended version of the contracts on Wednesday, the oil ministry spokeswoman said.

Big oil companies have been hot and cold about returning to Iran, expressing excitement about the country's oil riches but skepticism over the terms of working there.

Iran has ramped up its production by over 800,000 barrels a day since December, but the country needs to attract $130 billion in its oil and gas fields to meet its goal of raising its oil production capacity to 5.7 million barrels a day by the end of 2020.

Write to Benoit Faucon at [e-mail]



(END) Dow Jones Newswires

August 03, 2016 08:25 ET (12:25 GMT)

[the grumpy old men] 31/7/2016 17:23

Electric Vehicles Won’t Kill Off Oil Demand Anytime Soon
By Robert Rapier - Jul 29, 2016, 5:32 PM CDT EV interior

Before you start furiously typing out a retort, hear me out. First, I want to make it clear what I am not skeptical about. I am not skeptical about electric vehicles (EVs) continuing to grow rapidly for the foreseeable future. Indeed, I believe that will happen — although growth has slowed in the U.S. in recent years.

I am also not skeptical over the fact that EVs make sense for many people. Indeed, I would buy one myself if I could justify it economically. I have only put about 5,000 miles on my car in the past 2 years, so it’s hard to justify any sort of premium that could be paid off by fuel savings.

I am also not skeptical that EVs will get cheaper, and that improvements in batteries will extend their range. I believe tomorrow’s EV will be much better than today’s.

So far, so good. On these three points, I am on the same page with the most rabid EV enthusiast. But I am extremely skeptical about one thing.

I am skeptical that EVs are going to make any dent in our oil consumption in the foreseeable future.

Let me explain why by first examining global crude oil demand growth over the past three decades. In the 32 years since 1984, global crude oil demand has increased by 36 million barrels per day (bpd) – an average annual increase of 1.1 million bpd per year:

(Click to enlarge)

Year-over-year crude oil demand declined in only 3 of those 32 years, and in each case bounced back to the historical growth rate very quickly. Further, the average annual increase since 2010 has been well above the historical average at more than 1.5 million bpd per year.

Of course that’s history, which merely gives us an indication that the long-term trends for oil consumption have been up for a long time. The reason they continue to grow is that growth is being driven by developing countries. Demand in developed countries has been falling (although U.S. gasoline demand is at a record high this year). But that graph admittedly doesn’t necessarily tell us about the future. So we have to look for examples that may give some insight into the future.

I first give you Norway. Following years of very generous subsidies for EVs, Norway has the largest fleet of plug-in EVs per capita in the world. Norway’s growth rate for EVs has been higher than that of any other country, averaging an amazing 110 percent per year for the past seven years:

(Click to enlarge)

One would expect a decline in Norway’s oil consumption given those trends. After all, Norway is surrounded by members of the European Union (EU), where demand for oil since 2008 is down 14 percent (primarily in response to much higher oil prices). Nearby countries like Denmark (-14 percent), Sweden (-16 percent), and Finland (-21 percent) all had big declines.
Related: Forget Inventories – Drilling Cutbacks Will Lead To Much Higher Oil Prices

But not Norway. Norway’s consumption has trended slightly higher while all the countries around it experienced double-digit declines in petroleum demand since 2008.

(Click to enlarge)

Some may immediately note that Norway’s consumption has been relatively flat for several years, but keep in mind that demand was declining across the developed world in response to $100/bbl oil. So what happened in Norway? Shouldn’t demand there have declined at least as much as in countries that didn’t have explosive EV growth?
Related: Exxon Misses Estimates By A Mile, Plunges To Two-Month Lows

The reason the huge growth in electric vehicles didn’t translate into a reduction in demand in Norway is because it is set against a backdrop of a rising population and a growing fleet of vehicles on the roads (as is the case worldwide). The problem is that the conventional car fleet is adding cars faster than EVs are adding cars:

(Click to enlarge)

Also important to note that Norway is adding a lot of diesel engines to the fleet, another factor that helps explain the flattening in their oil demand. But, as the graph shows since 2008 they added about 300,000 diesel and gasoline cars to the roads, but despite the explosive growth in EVs the total over the same time period is only about 80,000 cars. And Norway’s explosive EV growth rate is starting to slow as the country scales back its generous subsidies.

Consider that in the U.S., from 2014 to 2015, new car sales of conventional internal combustion vehicles increased from 16.5 million to 17.5 million. Yet EV sales in the U.S. actually decreased from 122,438 to 116,099. In other words, they have a very long way to go to even dent the growth in conventional new car sales, much less make an actual reduction in the fleet.

This is essentially the problem with most projections that assume that EVs will soon take a big bite out of oil consumption. The world currently consumes over 90 million barrels per day (bpd) of crude oil. That number is growing by more than 1 million bpd each year, yet most projections fail to account for this growth that is due to growing population, more people driving, etc. Like what happened in Norway.

A recent Bloomberg article made this very mistake by assuming that fantastic growth rates in EVs could globally displace 2 million bpd by 2023, and that could crash oil prices. The only problem is that even in the unlikely event that EVs displaced 2 million bpd of demand, then global crude oil demand may only be 5 million bpd higher than it is today instead of 7. They assumed it would be 2 million bpd lower than today, again ignoring growth (and the reasons for that growth).

In any case, according to data at Inside EVs, in the U.S. 2016 EV sales year-to-date (YTD) are only about 16 percent higher than YTD sales a year ago. That would project to maybe an additional 20,000 EVs sold in the U.S. to reach nearly 140,000. Again, that’s against the backdrop of a fleet of 17.5 million conventional cars that increased sales by a million cars from the previous year.

Globally, EV sales are running 43 percent ahead of last year’s pace. That’s far behind Norway’s blistering pace that failed to reduce oil consumption, and well behind the 60 percent growth rate assumed by the Bloomberg article to cause a 2 million bpd drop in demand by 2023. If they assumed a lower growth rate of 45 percent — still unreasonably high in my view — they don’t impact 2 million bpd of demand until 2028. That’s another 5 years of demand growth for oil, but also importantly another 5 years of depletion of existing fields. Oil demand won’t continue to grow forever, because ultimately depletion will catch up and force prices much higher. In that case, what will happen isn’t the price crash that Bloomberg predicted, it’s the exact opposite.

We certainly need EVs, but I haven’t seen anyone put together a credible mathematical case that they will even arrest the growth in oil demand over the next decade. Inevitably, they rely on faulty assumptions of fantastic EV growth rates and zero growth for oil — which is contrary to our observations.

That’s why I am skeptical. If you project out far enough then indeed you can see EVs making a dent, but that’s far further into the future than proponents like to admit, and oil prices are likely to be much higher — not lower — when that happens.

By Robert Rapier

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[la forge] 28/7/2016 08:42

Total: Second Quarter and First Half 2016 Results

Posted By: GasNews Editor 28th July 2016

Total
Total’s Board of Directors met on July 27, 2016, to review the Group’s second quarter accounts. Commenting on the results, Chairman and CEO Patrick Pouyanné said:

“Although still volatile, the Brent price has recovered since the start of the year and averaged $46 per barrel in the second quarter 2016. Total captured the benefit of this rebound, and adjusted net income rose to $2.2 billion in the second quarter 2016, an increase of 33% compared to the first quarter 2016.

In the Upstream, production increased by more than 5% compared to the second quarter 2015. Obtaining a 30% interest in the Al-Shaheen concession in Qatar for 25 years was a major success, strengthening our presence in the Middle East on a giant field with a long plateau and low technical costs.

In the Downstream, results and cash generation remained strong at the same level compared to the first quarter 2016. The acquisition of retail and logistics assets in East Africa strengthens our position as the leader in Africa for Marketing & Services.
Efforts to reduce operating costs are continuing to bear fruit and we will surpass the $2.4 billion cost reduction target for this year. In the first half, organic investments were $8.7 billion, and are expected to be $18-19 billion for the year.

As part of its ambition to become the responsible energy major, the Group expanded its portfolio with the acquisitions of Saft in the energy storage sector and Lampiris in gas and electricity distribution.

The Group confirms the strength of its balance sheet with a net-debt-to-equity ratio stable at 30% at the end of June 2016.”

Highlights since the beginning of the second quarter 2016

Obtained 30% interest in the giant Al-Shaheen field in Qatar for 25 years starting July 2017
Loading of first Angola LNG cargo following the plant restart
Took control of Saft in the energy storage sector following a successful tender offer
Acquired gas and electricity distributor Lampiris in Belgium
Acquired import terminals and retail network in Kenya, Uganda and Tanzania
Signed an agreement to supply 0.4 million tons of LNG per year to Japan’s Chugoku for a period of 17 years.
The new organizational structure includes the following appointments to the Executive Committee: Momar Nguer, President, Marketing & Services as of April 15, 2016; Namita Shah, Executive Vice President, People & Social Responsibility; Bernard Pinatel, President, Refining & Chemicals effective September 1, 2016. Philippe Sauquet becomes President, Gas, Renewables and Power and Executive Vice President, Strategy & Innovation.

Full Report: Total

[grupo] 24/7/2016 18:04

Sunday 24 July 2016 3:18pm
Oil majors to stage sharp rebound after crude's modest revival
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BP will kick off oil major earnings season this week (Source: Getty)

Oil majors' second quarter earnings will show a sharp rebound when they're released next week, largely due to a modest recovery in the world's stricken oil markets.

BP will kick off proceedings when it reports on 26 July, followed by Total and Shell on 28 July and then Exxon and Chevron a day later.

"Oil majors' second quarter 2016 earnings are expected to recover strongly from first quarter trough levels, largely driven by a ... rebound in brent prices," analysts at HSBC wrote in a note.

Read more: North Sea oil firms urged to revisit contingency plans after Brexit vote

Crude prices averaged $47 per barrel from April to June, about a third higher than the previous quarter.

Cost-cutting exercises enacted to weather lower-for-longer oil prices should have helped the companies' upstream sectors, which are tasked with searching, drilling and subsequently extracting the black stuff.

"We expect all majors to report positive upstream earnings ... in the second quarter. As a reminder, half of our coverage posted upstream losses at similar oil prices just two quarters ago."

These operations were particularly hard hit by the oil rout which started in the middle of July 2014. This is because production costs remained largely fixed, while product prices tumbled.

Oil majors' sector which refine, market and sell crude products are likely to have remained a key growth driver in the second quarter, despite higher oil prices.

Read more: Opec has warned Brexit vote will knock European oil demand

This is because refining margins were higher across all regions, except the Singapore benchmark, HSBC said.

But it's unclear how long the good times will last, with oil prices losing some momentum recently.

While they hit a 2016 high above $50 per barrel on 8 June due to output outages, oversupply concerns have helped crude shed around 8.6 per cent so far this month.

[waldron] 19/7/2016 20:10

Total Completes Billion-Dollar Acquisition Of Saft

July 19th, 2016 by Joshua S Hill

French oil major Total has announced the successful completion of its billion-dollar acquisition of leading battery designer Saft.

Total-1Total announced on its website on Monday that it now held 90.14% of Saft Groupe shares following the public tender offer initiated by Total on Saft Groupe. The public tender offer will be re-opened from July 19 to August 2, 2016, “in order to allow shareholders who have not yet disposed of their shares to do so under the same terms.”

“Total is pleased with the success of this tender offer,” said Patrick Pouyanné, Chairman and CEO of Total. “Our acquisition of more than 90% of the shares shows the confidence Saft shareholders have in our industrial project enabling Saft to accelerate its development.”

“Saft is delighted to join with Total, a major player in the energy sector, which will enable us to accelerate our development,” said Ghislain Lescuyer, CEO of Saft Groupe.

The move gives Total a significant push towards fulfilling its promise to become a top three player in the solar energy industry within the next 20 years. In April of this year, Total announced a restructuring it called “One Total.” According to the company’s press release, the new “Gas, Renewables & Power segment will spearhead Total’s ambitions in the electricity value chain by expanding in downstream gas, renewable energies and energy efficiency.” Patrick Pouyanné said at the time:

“We intend to implement a proactive strategy in gas markets to meet demand and identify new outlets for our production. The Group will also produce and sell power from renewable sources. Electricity will be the energy of the 21st century and the growth of gas and renewables is driving us to fully capture margins across the entire electricity value chain. We have several goals in this area over the next 20 years: to be one of the top three solar power players, to expand in electricity trading and energy storage, to become a leader in biofuels, especially biojet fuel, while also exploiting potential development opportunities in other renewable energies. Our ambition is to create a new business that will help make Total the responsible energy major.”



Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.

[sarkasm] 17/7/2016 16:02

News ID:155142
Publish Date: Sun, 17 Jul 2016 19:19:31 GMT
Service: Iran
Total considers PSEEZ investment less risky, highly lucrative
Total considers PSEEZ investment less risky, highly lucrative
Representatives from the French oil giant Total conferred with head of Pars Special Economic Energy Zone (PSEEZ) on projects in the zone and their comparative advantage. They acknowledged that investment in PSEEZ is highly lucrative and less risky.

PSEEZ Director Hassan Shahrokhi briefed Total representatives on the capabilities and infrastructures of the zone and pointed out that the law on investment in special industries zones permits investors to draw on many exemptions and advantages.

He hoped that talks will soon bear fruit and lead to the inking of deals.

Establishment of petrochemical industries with an annual production capacity of 20 million tons is among the projects envisaged for the strategic zone.

[waldron] 15/7/2016 19:43

Oil prices bounced around this week, falling back on renewed concerns over a supply glut, but at times regaining ground. The IEA struck a negative tone regarding elevated inventories of both crude oil and refined products, and the high levels of storage will likely prevent a strong price rally in the third quarter. However, at the same time, the IEA said the market is moving closer to balance, and the Paris-based energy agency even issued a seemingly contradicting warning over the sharp cutbacks in upstream investment, which it says will leave the world short on supply in several years’ time. WTI and Brent closed out the week slightly up.

But the near-term outlook has turned bearish. The rush of refinery runs around the world has created an “epic overhang” of gasoline stockpiles, as Amirta Sen, the top oil analyst at Energy Aspects, described it. And the return of production from Canada, Nigeria, and potentially from Libya could restore some disrupted supply. There has been a lot of uncertainty surrounding the political situation in Europe following the Brexit, but for oil traders, the focus is shifting back to the crude oil market. “When the macro dust settles, which might take a while, it will become apparent that oil fundamentals are weaker than many realized,” Julius Walker, senior consultant at JBC Energy in Vienna, told Bloomberg. The EIA reported another decent though not enormous decline in oil inventories, but a surprising uptick in gasoline stocks spread pessimism around the market.

China adds to refined fuel glut. China stepped up its refining activity to a record high in June, and since domestic demand continues to come in lower than analysts anticipated for China, some of that product is being dumped onto the international market. Refinery runs hit 11 million barrels per day last month, or 3.2 percent higher from a year earlier. The high levels of processing are pushing down refining margins and leading to a flood of refined products being diverted into storage. That is putting strong downward pressure on crude oil prices.

But China’s oil production is falling. China is always viewed as a massive oil importer and consumer, but it is also a sizable producer. Low oil prices are forcing cutbacks at some of China’s high-cost oil fields. China’s production fell 4.6 percent in the first half of the year. PetroChina said that production will decline this year for the first time in 17 years.

Drilling old wells could add to U.S. supply. A new report from IHS Markit concludes that U.S. shale drillers could return to old vertically-drilled wells and drill them horizontally for new production. Because these wells have already been drilled once, the costs of drilling them horizontally for the first time would be substantially lower than drilling a fresh well. The report did not put an estimate on how much additional production could result from these old wells, but IHS said there is a lot of potential in vertical wells for drillers.

Shale more competitive than deepwater. Earlier this week consulting firm Wood Mackenzie released a report that concluded that U.S. shale is now more competitive than deepwater drilling projects around the world after two years of cost declines. Shale drillers have reduced costs by as much as 40 percent since 2014 while conventional drilling projects only cut costs by about 10 to 12 percent. As a result, moving forward, the industry will likely step up investment in shale projects, which are now more economical than large-scale deepwater plays. The Eagle Ford has breakeven costs of about $48 per barrel, parts of the Permian Basin have breakevens at $39 per barrel, while deepwater often needs oil prices as high as $60 per barrel.

Cnooc could abandon oil sands. Chinese state-owned oil company Cnooc purchased Nexen Energy in Canada in 2013 for $15 billion, but because of a series of mishaps at its Long Lake oil sands processing facility in Alberta, Cnooc might abandon the project. “The deal has turned out to be a bit of a dud for them,” said Gordon Houlden, a China expert at the University of Alberta, told The Wall Street Journal. At the time, the purchase of Nexen was China’s largest overseas acquisition on record, a large bet on Canadian oil sands. Since then, they have suffered several disasters – a pipeline spill last summer and an explosion at the same Long Lake facility in January, which killed two workers. The company is weighing whether or not to spend $100 million on repairs or shutter the facility instead. Long Lake turns heavier crude into lighter crude, and shutting it down would not only be a blow to Cnooc, but it would also negatively impact other oil sands producers who depend on the processing.

BP Deepwater Horizon bill rises to $61.6 billion. BP (NYSE: BP) added another $5.2 billion to its final tally for the 2010 oil spill, bringing the total to $61.6 billion. The British oil giant hopes the latest costs will be the last charge related to the disaster that will have a “material impact” on its finances.

ExxonMobil declares force majeure on Nigerian oil. The Niger Delta Avengers recently claimed a successful attack against the Qua Iboe crude pipeline, something that ExxonMobil (NYSE: XOM), the pipeline’s operator, denied. But Exxon declared force majeure on shipments of the crude export grade after a “system anomaly observed during a routine check of its loading facility.” Oil prices rose on the news. Expectations of a return of Nigerian oil production have ebbed and flowed with the news cycle – optimistic statements from Nigerian government officials talk up a return of crude production, but those sentiments are quickly dashed when the Niger Delta Avengers pull off fresh attacks. For now it is unclear how much production will come back in the short-term.

North Sea set to be hit with workers strike. Oil workers in the North Sea that provide maintenance services to Royal Dutch Shell (NYSE: RDS.A) voted to strike over pay and working conditions. The FT calls it the largest industrial dispute in the British oilfields in a decade. The strike is another blow for a region that is struggling with declining competitiveness.

In our Numbers Report, we take a look at some of the most important metrics and indicators in the world of energy from the past week. Find out more by clicking here.

Thanks for reading and we’ll see you next week.

Best Regards,

Evan Kelly
Editor, Oilprice.com

[the grumpy old men] 11/7/2016 21:10

Citigroup is “especially bullish” on commodities in 2017, the bank says.

“The oil market is treading water for now, but the oil price overshot to the downside earlier this year and this is clearly setting the stage for a bullish end to the decade,” Citi analysts, led by Ed Morse, wrote in a research note published on July 11.

There is a quite a bit of volatility in commodity markets, especially for oil, but global demand continues to grow at a steady pace. Prices have crashed on oversupply, but with oil production going offline, particularly in the U.S., the markets could over-correct, creating the conditions for higher prices next year.

More recently, the Brexit vote raised concerns about global growth and financial stability, but it will be forgotten as demand continues to soak up excess supply. To be sure, investors are wary of getting burned again after oil prices briefly rallied to $60 per barrel a year ago, which was followed by a renewed price crash.

But Citi says this time is different. “Unlike last year, when commodity markets rallied through the second quarter only to fall sharply come the third as oversupply persisted, this rally looks more sustainable as physical markets have tightened considerably,” Citi analysts wrote. “Global demand continues to grow at a moderate rate while the pullback in capital spending is reducing not just supply growth but total supplies across nearly all extractive industries.”
Related: U.S. Oil Rig Count Higher, Sees Biggest 2-Week Rise In A Year

Oil prices will likely rise in the coming months, with a more sustained rally set for next year. “Prices are expected to resume their ascension in 2017 as the market rebalances further and this should be bolstered by deepening cuts in non-OPEC oil production,” Citibank said. “[T]he pendulum is clearly swinging from the bears to the bulls.”

Indeed, the U.S. continues to see production drop off. The latest data from the EIA shows that output fell by 194,000 barrels per day for the week ending on July 1. Weekly estimates are not always the most accurate, but the decline is surprisingly large. If true, U.S. oil production is down 1.2 million barrels per day from the April 2015 peak, with more declines expected.

By Charles Kennedy of Oilprice.com