Oilexco Share Discussion Threads

[joestalin] 01/10/2018 16:59

Serica and BP mentioned on yahoo finance

[la forge] 30/9/2018 15:50

Is BP PLC a Buy?
The oil-industry giant turned in a fantastic second quarter. But can it keep outperforming?
John Bromels
John Bromels
(TMFTruth2Power)
Sep 30, 2018 at 9:05AM

As shareholders of BP (NYSE:BP) are well aware, the company has experienced numerous setbacks over the last decade. First, there was the disastrous Deepwater Horizon oil spill in the Gulf of Mexico, and then the oil-price slump of 2014-17.

But in 2018, BP's stock has come roaring back. Oil prices are high, production is up, and the company is offering a fat dividend yield. Of course, BP's peers like Royal Dutch Shell (NYSE:RDS-A) (NYSE:RDS-B) are likewise outperforming. Nevertheless, let's take a peek under the hood to make sure BP can sustain this momentum, so we can tell whether the stock is a buy.
A smiling young man stands with his arms up next to an oil drum from which is erupting a cloud of paper currency

2018 has been great for oil industry investors so far. But can BP continue to outperform? Image source: Getty Images.
The power of price

To see how much the price of oil affects BP's performance, look no farther than the company's profit margins. This five-year chart of BP's and Shell's profit margins on a trailing-12-month basis is overlaid with the per-barrel price of Brent Crude (the red line), and shows how profitable the big oil companies were prior to the oil-price slump, and how well they've recovered from its depths in early 2016:

BP Profit Margin (TTM) Chart

BP Profit Margin (TTM) data by YCharts.

What you may notice about this chart is that even though oil prices haven't yet returned -- and may never return -- to their $100-plus per barrel highs, Shell's profit margin is now higher than it was immediately prior to the price crash, and BP's has almost recovered.

That's thanks to the cost-cutting measures that big oil companies took during the price downturn. By streamlining their operations in an attempt to be profitable with oil prices hovering around $50 per barrel, as they were through much of 2016 and 2017, BP and Shell were positioned to outperform when oil prices finally jumped above $60 per barrel in late 2017.
Breaking even

BP's CFO Brian Gilvary has stated that the company's break-even point -- the per-barrel oil price at which it will cover its production expenses -- is about $50, but BP expects to continue to cut costs and bring its break-even point to a range of $35 per barrel to $40 per barrel by 2021. If BP can be this profitable at its current breakeven, imagine how well it will do with an additional $10-$15 in per-barrel profit, given that it produces 2.5 million barrels of oil equivalent per day.

Of course, this assumes that oil prices don't tumble again, which is far from a guarantee. However, even in the depths of the oil-price slump, per-barrel oil prices stayed mostly above $40, only dipping below that point for about four months, from December 2015 to April 2016.

Hypotheticals have limited value, but if BP had had a break-even point of $35 per barrel or $40 per barrel during the downturn, it probably would have been operating in the black for both 2015 and 2016, thanks to its lucrative refining and marketing business, which isn't directly affected by oil prices. That bodes well for how it might fare even in the event of a future oil-price downturn.
Flying high

BP's high profit margins were on display in the most recent quarter, Q2 2018, as the company reported impressive numbers both financially and operationally.

Revenue was up 34.2% year over year, to $76.9 billion. BP turned that revenue into $2.9 billion (with a "b") of net income, up from just $156 million (with an "m") in the prior year's Q2. Operationally, BP was firing on all cylinders, with total production up 3.3% over the year-ago quarter. Production is likely to continue to increase thanks to BP's purchase of the U.S. shale assets of Anglo-Australian company BHP Billiton.

In addition, the company raised its dividend for the first time in four years and executed a $200 million share buyback. If BP can keep executing this well, shareholders should have no cause for complaint in the coming months and years.
And the answer is...

BP seems to have fully recovered from the oil-price downturn, and has been making constant progress toward improving its operations and rewarding its shareholders. With oil prices showing no signs of weakening, it's likely that BP will continue to outperform. BP looks like a solid buy.

[la forge] 30/9/2018 15:39

Shell, BP go separate ways as Washington voters consider fee on greenhouse-gas polluters
Originally published September 30, 2018 at 6:00 am
BP’s Cherry Point refinery, the state’s largest, processes 240,000 barrels of crude oil each day at the facility in Blaine. The company has given more than $6.3 million to the effort to defeat I-1631. (Thomas James Hurst / The Seattle Times)
BP’s Cherry Point refinery, the state’s largest, processes 240,000 barrels of crude oil each day at the facility in Blaine. The company has given more than $6.3 million to the effort to defeat I-1631. (Thomas James Hurst / The Seattle Times)

Royal Dutch Shell opts to sit on the sidelines while BP shovels money into opposing Initiative 1631.
Hal Bernton By Hal Bernton
Seattle Times staff reporter

In speeches, reports and online posts, BP and Royal Dutch Shell leaders proclaim support for government rules that put a price on greenhouse-gas pollution resulting from the combustion of oil, natural gas and coal.

But as Washington voters head toward a November vote on an initiative to impose a carbon fee on fossil fuels, the two oil giants have gone their separate ways.

Shell, which operates the state’s second largest refinery, in Anacortes, has opted to sit on the sidelines of what has emerged as one of the most expensive initiative battles in Washington history. If approved, Initiative 1631 could serve as a model for other states.

“That Washingtonians are proposing a price on carbon is a good thing. But it’s my view, this fee was designed with some considerable imperfections,”; said Shell CEO Ben van Beurden, in a statement to The Seattle Times. “Because of that, I can’t support it. But we are not going to fight it, either.”
Featured Video
Artifacts of Injustice (2:38)
Most Read Local Stories



For BP, this initiative is cause for alarm. The company has shoveled more than $6.3 million into the opposition campaign that so far has collected more than $20 million to denounce I-1631 as an unfair burden to consumers and small-business owners.

“We cannot support I-1631 in its final form because it’s a poorly designed policy that would disrupt Washington’s economy without achieving significant reductions in carbon emissions,” wrote Bob Allendorfer, manager of BP’s Cherry Point refinery, the state’s largest, in an Aug. 3 letter to state Rep. Joe Fitzgibbon, D-Burien.

These divergent political paths reflect the strains within an oil industry struggling to figure out how to respond to climate change in an era when runaway wildfires and record-shattering rainfalls bring home the risks of a warming world.

Most oil companies have set aside decades of climate-change denial to acknowledge the risks that lie ahead from the atmospheric build up of emissions released by fossil fuels. These policy shifts come amid stepped-up pressures from some shareholders, consumers and a rash of lawsuits — including one from King County — alleging that major oil companies should pay billions of dollars in compensation.

Washington has emerged as an important climate-change state in the oil industry because it has five refineries and is a kind of U.S. test kitchen for carbon pricing. Within the past decade, the Legislature repeatedly considered — and rejected — different recipes for cutting these emissions, and voters statewide in 2016 rejected a carbon tax.

I-1631 offers a different approach: an escalating fee that would be assessed on most fossil-fuel emissions in Washington. The fee is projected to raise more than $1 billion by 2023, and the money would be invested in projects and programs to help reduce the state’s reliance on these fuels and adapt to climate change.
PUBLICITÉ

The broad principles of carbon pricing have been repeatedly backed by the leaders of Shell and BP. They say such government regulation is key to reducing fossil-fuel consumption in the increasingly longshot effort to try to limit global warming to less than 3.6 degrees Fahrenheit — the target set by the 2015 Paris agreement that has gained the backing of nearly 200 nations.

A Shell “Energy Transition” report this year called carbon pricing an “essential tool for reducing emissions,” and noted that investments in electric-vehicle charging networks and other technologies would reduce the company’s reliance on oil and gas production. And Shell appears to accept a French government move to ban the sale of gas- and diesel-powered cars by 2040.
Sign up for Morning Brief

Delivered bright and early weekday mornings, this email provides a quick overview of top stories and need-to-know news.

“It is certainly something that we recognize needs to happen to meet the goals of the Paris Agreement,” said David Hone, chief climate adviser for Shell who writes a corporate blog.
Corporate positions

BP also has rallied around the Paris agreement.

In a 2015 speech before the conference that produced the accord, BP chief executive Bob Dudley said “there is clearly more oil and gas out there than we can burn if we are to have a sustainable future.”

BP officials say the company has long supported a cap-and-trade system that puts a price on carbon in Europe. It has backed legislation to renew the California cap-and-trade program, and it is a founding member of the Climate Leadership Council, which advocates a nationwide carbon tax in the U.S.

Other oil companies have not been so outspoken. They include Phillips 66, which operates a Washington state refinery. The company has emerged as the largest donor so far to the I-1631 opposition campaign, with contributions of more than $7.3 million.

Phillips 66 acknowledges the risks of climate change in a Securities and Exchange Commission filing warning investors that rising sea levels “may disrupt our ability” to operate some transport facilities and refineries. In that filing, the company lists “climate change legislation” as a “risk factor” that could increase operating costs and reduce demand for its products.

Some industry observers say the actions of BP and Shell sometimes do not reflect their green rhetoric.

In Europe, BP and its trade-group representatives have lobbied heavily for “special treatment measures,” said Ed Collins, a project manager with London-based InfluenceMap.Org, which tracks corporate actions on climate change. “This lobbying has long undermined the potential of the scheme to reduce emissions.”

In the U.S., BP and Shell are members of the Western States Petroleum Association. The group opposed 2016 California legislation that set an ambitious 2030 cap on state greenhouse-gas emissions, according to Alex Jackson, a California-based staffer with the Natural Resources Defense Council. He said the oil industry “fought that tooth and nail.”
Shell retreats

In Washington, the Western States Petroleum Association is the sponsor of the committee formed to defeat I-1631.

On April 25, the five companies that operate refineries in Washington — BP, Andeavor, Phillips 66, U.S. Oil & Refining Co. and a Royal Dutch Shell subsidiary — made initial pledges totaling several hundred thousand dollars to the committee.

By July, Shell had decided to suspend participation in the opposition campaign. “Voters will decide what the best course is,” said Curtis Smith, a Shell spokesman.

Shell’s willingness to break from the opposition was welcomed by backers of I-1631.

“I about fell out of my chair,” said state Sen. Reuven Carlyle, D-Seattle. He sought unsuccessfully to pass a carbon tax during the last legislative session and is a big supporter of the ballot measure. “I think it’s a dramatic step by a company that wants to have a degree of philosophical consistency.”

BP officials reject the idea there are inconsistencies in their approach. They note BP worked closely with Carlyle this year in the failed Olympia effort to gain passage of a carbon tax — and would work with him again next year if voters reject the initiative.

BP’s preference has been for a carbon fee (or tax) that is spread across all sectors of the Washington economy. Instead, during the last legislative session, lawmakers granted exemptions to some industries facing international competition.

Once that happened, BP and other oil companies did not turn their backs on the legislation. They succeeded in getting their own exemption from the carbon tax on greenhouse-gas emissions released from refinery processing (not the fuel they produce), according to Carlyle. He gives BP credit for “working hard during the legislative process to try to find a way forward.”

The initiative, unlike the failed legislation, does not offer oil companies the refinery exemption. But it does exempt some other significant sources of carbon pollution, including a coal-power plant scheduled to shut down in 2025 and an Alcoa smelter. BP officials say those exemptions undermine the goals of reducing emissions, a charge proponents reject.

BP officials also fault the initiative for failing to prevent other state or local carbon regulations that could potentially pile on top of this one.

“We are saying it is flawed,” a BP spokesperson said Friday. “If we are going to do this, we have to do it right.”

Initiative proponents have a different take.

“They claim to tell the world they are in favor of acting on climate change. But when they have the opportunity to live that value — they don’t,” said Vlad Gutman-Britten, Washington director of Climate Solutions and one of the drafters of the initiative.
Hal Bernton: 206-464-2581 or [e-mail]

[bountyhunter] 30/9/2018 00:50

Brent header chart rolled.

[bountyhunter] 29/9/2018 13:38

Brent header chart rolled

[bountyhunter] 29/9/2018 08:59

Interesting re Leslie, at least it doesn't appear at all likely that it will ultimately end up over here, altbough perhaps I shouldn't say that as it's confounded the weather models to date!

[waldron] 28/9/2018 16:56

Petrobras, Exxon, Shell, Chevron Among Winners of Brazil Pre-Salt Oil Auction--update
28/09/2018 4:38pm
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Friday 28 September 2018
Click Here for more Shell A Charts.

By Luciana Magalhães and Jeffrey T. Lewis

SÃO PAULO -- Petróleo Brasileiro SA, Royal Dutch Shell PLC., Chevron Corp. and Exxon Mobil Corp. were among the winners in the auction Friday of Brazilian oil fields in the country's rich pre-salt region.

The government of President Michel Temer auctioned off four blocs, with the signing bonuses totaling just over 6.8 billion reais ($1.7 billion). Bids were made by offering a percentage of profit oil, which is the proportion of gains from the fields that will go to the government.

Energy companies were eager to bid in Brazil's last oilfield auction ahead of presidential elections in October because it's unclear when, and under what terms, the next government might sell more blocs in the pre-salt area, according to Adriano Pires, director of Rio-based think tank Brazilian Infrastructure Center.

The presidential candidates leading the polls ahead of the Oct. 7 first-round election have broadly different economic proposals. Right-wing candidate Jair Bolsonaro favors a more hands-off policy regarding the country's natural resources, while Fernando Haddad's Workers' Party has traditionally been more interventionist.

"It was more competitive because it was the last one under this government," he said, noting the various positive elements of the auction. "Those are good areas, the pre-salt is sought after by all the companies, and the price of oil is at $80 a barrel."

The Brazilian units of Shell and Chevron won the Saturno field with an offer of 70.2% of profit oil. The companies will pay 3.1 billion reais for the field, and each will have 50% of the consortium.

Exxon Mobil Corp.'s Brazilian unit and QPI Brasil won the Titã field, offering 23.49% of profit oil, and paying 3.1 billion reais. Exxon Mobil will have 64% of the consortium and QPI Brasil will have the remainder.

BP Energy, Ecopetrol and Cnooc won the Pau Brasil field, bidding 63.79% of profit oil, and paying 500 million reais. BP will have 50% of the consortium, Cnooc will have 30% and Ecopetrol will have 20%.

Petrobras, as Brazilian oil company Petróleo Brasileiro is known, offered 10.01% of profit oil to the government and was the sole bidder for the bloc.

The auction came a day after Petrobras said it agreed to an $853.2 million settlement with U.S. and Brazilian authorities to end yearslong investigations tied to the Operation Car Wash probe of bribery and kickbacks at the company.

The settlement eased concerns about the company's legal liabilities and will permit it to borrow more cheaply in international markets, analysts said.

The agreement "leaves behind the dark past of interference and corruption," said Décio Oddone, director general of the ANP.

Friday's auction was the fifth sale of areas in the pre-salt region off the southeast Brazil coast near São Paulo and Rio de Janeiro, where studies show as many as 100 billion barrels of crude are locked under salt layers far beneath the seabed.

The pre-salt reserves were discovered in 2006, but burdensome rules for their exploitation, including a rule that Petrobras had to be the operating partner with at least 30% of any consortium, discouraged interest in the area.

After the government eased those rules last year, allowing other companies to work without Petrobras if it declined to participate, interest in the offshore fields increased.

Write to Luciana Magalhães at [e-mail] and Jeffrey T. Lewis at [e-mail]



(END) Dow Jones Newswires

September 28, 2018 11:23 ET (15:23 GMT)