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[ariane] 30/5/2018 13:38

Gazprom profit jumps after gas shipments to Europe surge
By Elena Mazneva on 5/30/2018

MOSCOW (Bloomberg) -- Gazprom’s profit jumped to the highest in three years as natural gas sales to Europe surged.

Unexpectedly cold weather from Germany to the UK boosted Russia’s gas sales into the region by 8% in the first three months of the year. That along with stronger prices helped lift income for the nation’s gas-pipeline monopoly.

The results may raise pressure on Gazprom’s management to increase its dividend payout, something the company has resisted as it’s boosting investment in projects that will expand its reach deeper into Europe and Asia. Gazprom is sponsoring the Nord Stream 2 link that will funnel gas into Germany underneath the Baltic Sea, bypassing political hot spots along the main existing transport route through Ukraine.

“Gazprom may show really exceptional results this year, backed by exports to Europe, yet that wouldn’t necessarily mean an extra gain to its shareholders,” said Andrey Polischuk, an energy analyst at Raiffeisen Centrobank in Moscow. “Given its investment plan and a need to repay debts and cover interest payments, there won’t be enough cash to provide a long-awaited dividend increase, which people have been discussing from the year dot.”

Revenue in the first quarter reached a record, boosting net income 11% and returning Gazprom to positive free cash flow. Its shares gained as much as 0.6% in Moscow trading on a day when its rivals in Russia slipped along with oil prices.

Gazprom’s net income climbed to 372 billion rubles ($5.93 billion) in the first quarter from 333 billion a year ago, with revenue reaching a record 2.14 trillion rubles, according its statement Wednesday. The average estimate of six analysts surveyed by Bloomberg Data was for a profit of 349 billion rubles.

Free cash flow, which analysts monitor as a source of money for dividends, rose to 26 billion rubles from a negative 216 billion rubles a year earlier.

As Gazprom aims to beat last year’s record shipments to Europe, it has said there’s no need for a major change in the dividend level until about 2020 when the company passes the peak in its investment program.

Gazprom raised its estimate for an investment plan of the parent company and its key units for this year to 2.01 trillion rubles from 1.98 trillion disclosed in April, according to the statement.

The company may face a decline in consumption later this year as higher prices encourage customers to find alternative sources of supply, like liquefied natural gas.

Higher gas prices may damp demand in Europe “a bit,” according to Gazprom’s biggest export client, Uniper AG. Kommersant newspaper reported that Gazprom data shows EU power generators cut consumption in the first quarter when utilities enjoyed ample output from wind and hydro plants.

[sarkasm] 29/5/2018 09:18

Shell opens LNG refueling station for trucks in Belgium
By Compelo Staff Writer
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Oil and gas firm Shell has launched its 3.5KT capacity LNG station in Herstal, Liège, Belgium, to cater to trucks.

Said to be the first of its kind in Belgium, the station is located near the three-border point at the E313 which is claimed to be a key route for international road freight.

Shell Belgium commercial director Laurent Charlot said: “LNG fuel is an important option for transport companies. Shell is committed to thriving throughout the energy transition and LNG will play an increasing role in the energy mix.

“We expect demand for LNG to grow and continue to work with truck manufacturers, customers and policymakers to promote the use of LNG as a cleaner-burning and more affordable transport fuel. The station in Herstal is an important step in the further expansion of our network of LNG stations in Europe.”

The new station can supply 150 trucks with LNG daily. LNG is claimed to be cleaner-burning than diesel and produces less sulfur, particulates and nitrogen oxides.

Belgium Federal Minister of Energy, Environment and Sustainable Development Marie Christine Marghem said: “With the rising demand for energy and the increasing need to reduce transport emissions, we face the challenge of how to make transport both more efficient and cleaner at the same time.”

Shell said that LNG plays a significant role as a solution for heavy-duty road transport.

Additionally, road transport companies are increasingly opting LNG fuel as it offers financial and environmental benefits compared to conventional diesel, the firm noted.
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Shell currently operates seven LNG stations in the Netherlands including in Rotterdam, Waalwijk, Amsterdam, Pijnacker, Waddinxveen, Eindhoven and Heerenveen.

Over the next 12 months, the firm plans to open further LNG stations in Europe as it sees increased demand for LNG fuel from heavy-duty road transport sector.

By 2025, Shell Retail business aims to generate 20% of its fuels margin from low-emission energy solutions at its stations.

[grupo guitarlumber] 28/5/2018 17:09

Crude calculation: Just how much oil does Saudi Aramco have in reserve?
Author
Frank Kane
May 27, 2018 23:40
1556

Now that the initial public offering of Saudi Aramco has been officially put back until 2019, the company can give preparations for what could be the biggest IPO in history the detail they deserve.
Does it matter that the IPO will not go ahead on the original schedule that had it taking place, in some form, before the end of this year? Probably not. Policymakers like to stick to their pledges, but an event of this size and scale is surely too big and important for the future of the Kingdom to be rushed.
With the oil price rising, the fiscal pressure is relaxed for the Saudi authorities, which in any case have shown themselves adept at raising revenue and capital through other means, be it from efficient tax collection or forays into the international capital markets.
Vast financial reserves meant there was never any real imperative to get the IPO away under any circumstances, and now Aramco and its advisers can concentrate on getting it right.
One area that will increasingly come under the microscope is the tangled questions of reserves, and what value
can be placed on the Kingdom’s huge reserves of oil and gas. Given that the
$2 trillion valuation placed on Aramco when the IPO was first suggested was at least in part a reflection of the extent and value of those reserves, anything that affects them will have an effect on the price the markets put on Aramco in an IPO.
A recent visit to Aramco’s Dhahran headquarters gave some idea of the latest thinking on this subject, and an indication of the company’s strategic direction. The basic philosophy is that Aramco should optimize its ability to produce oil efficiently, regardless of the commercial or geopolitical considerations that might affect the quantity and price it
comes to market.
The concept of “oil in place” is an intriguing one in the oil industry. Basically, it means the total capacity, historic and future, of a reservoir. In Aramco’s case, this means all the wells under its jurisdiction in the Kingdom.

There is an issue of credibility involved, especially for a company, such as Aramco, preparing for a flagship IPO on global markets.

Frank Kane

Aramco’s current estimate of oil in place is quite specific: 807 billion barrels. This is comprised of about 145 billion that have already been produced in the 80 years since crude was first discovered in economic quantities on the Dammam Dome; around 260 billion that is frequently quoted as Aramco’s “proven” reserves; and a balance of about 400 billion listed by the company as “probable, possible and contingent” reserves.
You do not have to be an energy expert to see that if some of that 400 billion “probable̶1; is transferred to the “proven” column then the company should, in theory, be worth more.
However, it is not quite as simple as that, as real energy experts point out. There is an issue of credibility involved, especially for a company, such as Aramco, preparing for a flagship IPO on global markets. Essentially, you have to get people to believe that the new reserves valuation is credible.
For example, many experts do not believe Venezuela’s official position giving it the biggest reserves in the world. A report a couple of years ago “showing”; that the US had bigger reserves than either Saudi Arabia or Russia was met with equal skepticism, regardless of the ability of the shale industry to keep pumping the stuff.
So it is essential that the reserves estimate comes from a reputable source. Aramco has hired two of the best independent valuers in the world, Dallas-based DeGolyer and MacNaughton, and Gaffney, Cline and Associates (part of oil services giant Baker Hughes) to review reserves as part of the IPO preparation.
Although the actual figure is a closely guarded secret, Aramco sources say that the initial results from these
valuations show a number for “proven” reserves significantly higher than the 260 billion figure.
The other factor that determines the extent to which reserves can move from the “possible̶1; to the “proven” column is the quality of technology the company has developed to exploit the reservoir. From a layman’s point of view, the facilities in Dhahran look cutting edge, and the whole thrust of Aramco’s long-term strategy has been to invest in high-quality research and development with the aim of becoming a high-tech digital company, rather than just a pumper of crude.
Advance technology could even lead to an increase in the “oil in place” figure, with Aramco technicians suggesting a total closer to 900 billion barrels could be achievable.
Reserves are not the only factor involved in valuation, of course. Some analysts tend to discount the value of reserves that may be difficult to access; others put a declining value on oil in the ground depending on how long it will remain there, given long-term pressures on oil from the renewables industry.
And investors will look just as closely at the financials — cash flows, dividends, royalties and tax — as they will at the carbon fundamentals.
But Saudi Arabia has a good case that its vast reserves have actually been underestimated in the past, and now Aramco has the time to explain that to the market.

Frank Kane is an award-winning business journalist based in Dubai. Twitter: @frankkanedubai

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view

[bountyhunter] 28/5/2018 09:23

"Biggest Ever Change’’ In Oil Markets Could Send Prices Higher - OilPrice.com today