Shell Share Discussion Threads

[xxxxxy] 13/8/2021 09:45

Don't agree. People don't click links that often for various reasons. Also link not always functional across different devices. When it all functions good though.

[johnwise] 13/8/2021 09:22

La Forge 13 Aug '21 - 09:16 - 18130 of 18130

Why Don't you just post the link instead of wasting all that space?

[la forge] 13/8/2021 09:16

Divestment: Wood MacKenzie Values Shell’s Equity in JV Assets at $2.3bn
August 13, 2021 6:00 am
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*Says IOC must get consent, negotiate NNPC’s pre-emptive rights before asset sale
*19 OMLs listed for divestment

Emmanuel Addeh in Abuja

The road to the planned sale of Royal Dutch Shell’s assets in Nigeria appears clearer now, with Wood MacKenzie, a leading global oil and gas consulting firm, putting the total value of Shell Petroleum Develop Company (SPDC), the subsidiary it proposes to totally divest from, at about $2.3 billion.

Last week Tuesday, THISDAY had reported the Nigerian National Petroleum Corporation (NNPC) as saying it would protect the interest of Nigeria in any transaction involving international oil companies interested in divesting from the country.

Group Managing Director of the corporation, Mr Mele Kyari, who addressed the issue in our report then had also said the NNPC cannot stop any of the oil concerns from deciding to sell off any of their assets as far as the rules are followed.

Part of the conditions for consummating the deal, Wood MacKenzie, stated in a document obtained by THISDAY yesterday, also includes that the International Oil Company (IOC) must get consent as well as negotiate the Nigerian National Petroleum Corporation’s (NNPC) pre-emptive rights before the assets would be sold.

Two weeks ago, THISDAY had reported that the parent company had launched a major divestment of its Nigerian assets, especially those in the shallow-water and onshore and that the oil giant had already hired Standard Chartered to sell its SPDC, in a deal which could be one of the biggest in Africa.

A Shell spokesman had told THISDAY that the company was in talks with the Nigerian authorities to ensure a smooth transition in whatever course the company decides to take concerning its activities in the country, but declined to go into the specifics.

“Discussions with the Nigerian government are ongoing on the next steps for our onshore business in Nigeria. We are in the early stages of reviewing the commercial options,” the Shell official had stated.

In May, the company’s Chief Executive Officer, Ben van Beurden, had while speaking at the company’s annual general meeting, said Shell could no longer afford to be exposed to the risk of theft and sabotage in its Nigerian operations.

But according to the latest document, 19 Oil Mining Leases (OMLs) would be put up for sale by the oil giant in onshore locations and shallow waters in the company’s eastern and western operations in the Niger Delta.

But the company is only selling its 30 percent equity in the Joint Venture (JV) assets, while the rest is owned by NNPC (55 percent), Total (10 percent), while Eni owns percent in the NNPC-Shell JV.

Wood MacKenzie, also known as WoodMac, described the move as radical, saying the decision could have seemed unlikely only 12 months ago, but was highly symbolic of what the energy transition means for IOCs in Africa, especially 63 years after the company produced its first barrel in Nigeria.

It listed the assets up for sale as OML 11, OML 20, OML 21 (Assa North), OML 22 (Enwhe), OML 23 (Soku), OML 25, OML 27, OML 28 (Gbaran-Ubie), OML 31, OML 32, OML 33, OML 35, OML 36, OMLs 43 and 45 (Forcados-Yokri), OML 46, OMLs 74 & 77 and OML 79.

Giving a background to the company’s decision to divest from the facilities, MacKenzie stated that emissions from Shell’s assets in the onshore and shallow water delta are among the highest in its global portfolio.

It stated that this was due to ageing infrastructure, under-investment, vandalism, continued flaring and the harsh operating conditions, adding that until now, Shell has sold oil blocks but kept gas blocks supplying Nigeria Liquefied Natural Gas (NLNG).

It further stated that the integration of the assets with oil infrastructure coupled with the ever-present security risks may have further persuaded Shell that a clean break from the onshore delta is, on balance, preferable.

“Although Shell would rely on third party gas supply into NLNG (in which it holds 25.6 per cent), existing contracts would be novated to a buyer, while it can meet most of its Train 7 supply from OML 144, which is outside the JV.

“The domestic gas market continues to be extremely challenged as evidenced by the recent announced 13 per cent cut in gas-to-power prices. Rather than sell single OMLs, Shell is seeking buyers for asset packages in the eastern, western and shallow water delta,” the firm stressed.

However, the report stated that before any major decision could be taken, Shell must negotiate with NNPC (holder of 55 per cent in the JV assets), on the terms of a sale.

“This could cover NNPC’s pre-emption rights, treatment of outstanding JV liabilities including decommissioning, the fate of the JV’s terminals, transfer of staff, and host community approval,” it said.

According to MacKenzie, Shell’s priority was identifying credible buyers and ensuring deal completion and wants to limit negotiations to hand-picked bidders only, thus avoiding a long drawn-out process, but would need NNPC’s buy in.

However, the oil and gas consulting firm raised posers over the possibility of getting buyers, although it admitted that Nigerian independents and new entrants were eager to acquire under-invested assets with plenty of volume upside.

“Playing at home, their acceptance of risk differs markedly from international E&Ps, so there will be few in the latter category. But in the energy transition era, can bidders raise enough finance to acquire, and invest in, a challenging portfolio of swampy assets?” it asked.

It noted that deal financing would be necessarily complex to mitigate risks, but pointed out that the recent OML 17 transaction highlighted that with a consortium of buyers backed by local and international lenders with multiple layers of debt, commodity traders would see off-take opportunities in return for funding and some may even consider equity.

According to the report, Shell itself may provide finance to help smooth deals and could maintain an indirect interest in the OMLs, perhaps within a special purpose vehicle, coupled with a clear exit strategy.

“This would get assets off the balance sheet, and provide more comfort to lenders. Contingent payments might also feature. Innovative solutions will be needed. A complete sell-off would be historic. However, all 19 OMLs will be extremely hard to shift in the current environment,” it said.

MacKenzie disclosed that there could be as much as four billion barrels of Oil Equivalent (BOE) across the JV.

“However, we consider only 20 per cent to be commercial due to a lack of investment, crude theft, insecurity and gas market constraints. Five of the OMLs are undeveloped.

“Our valuation of Shell’s 30 per cent in the JV (excluding export pipelines and terminals) is $2.3 billion, at Net Present Value (NPV) 10, Jan 2021, $50 long-term oil price. But this is based on the current sub-optimal, business-as-usual investment profile,” it noted.

MacKenzie stressed that a competent buyer/operator, giving priority to the assets, could commercialise much more than 20 per cent of the resource base, although the availability of funding for the JV partners will, as ever, dictate how much.

The firm said the recently passed Petroleum Industry Bill (PIB) overhauls the fiscal regime offering materially lower oil royalties and taxes, hence, there was much more upside than downside to its base case, which bidders would need to carefully quantify.

“Few, apart from Seplat have created value through Mergers and Acquisitions (M&A). Overpaying for resources in the ground has been disastrous for some previous buyers, so an appreciation of what is fair value given all the above-ground risks and opportunities is essential,” it added.
In February, a Dutch court held Shell’s Nigerian subsidiary responsible for multiple oil pipeline leaks in the Niger Delta and ordered it to pay damages to farmers, leading van Beurden to call its Nigerian onshore assets as a “headache̶1;.

The company’s onshore joint venture SPDC has sold about 50 per cent of its oil assets over the past decade, with its stake in SPDC giving it 156,000 barrels per day of oil equivalent in 2020, of which 66,000 barrels were oil.

[waldron] 13/8/2021 07:25

European markets set for muted open as investors assess data, Covid

Published Fri, Aug 13 20212:12 AM EDT

Elliot Smith
@ElliotSmithCNBC


Key Points

Overnight, MSCI’s aggregate gauge of global stock markets hit a new record high.

“Arguably, markets are now more focused on the state of play regarding Covid, and in particular, the spread of the Delta variant,” Xian Chan, chief investment officer for wealth management at HSBC, said in a note.

LONDON — European markets are heading for a cautious open Friday, as investors assessed global economic indicators and rising Covid-19 cases in the search for direction.

Britain’s FTSE 100 is seen around 7 points higher at 7,200, Germany’s DAX is set to add around 7 points to 15,945 and France’s CAC 40 is set to nudge around 2 points higher to 6,884, according to IG data.

[planit2] 12/8/2021 20:30

"Transition has to happen by cutting demand"
Can't happen without increasing demand first to build the renewable infrastructure.

Cutting supply just raises prices. Going green also raises prices. Increasing taxes also increases prices. There is a pattern here I can't quite put my finger on.

Strategically, the oil companies need to reorganise due to the complicated way their emissions are measured (so not just reputational). By careful planning they can reorganise, sell parts off, expand others and end up with much lower 'counted CO2' for the same profits.
For example if they get penalised the same for selling fuel to another oil company or to an end consumer, they might as well just sell to the end consumer by expanding the forecourts (not sure if this works exactly but it illustrates the point, make maximum profit for each CO2 molecule counted).

The above will have repercussions throughout the industry as it gets reorganised. The most dirty parts will get sold off to Russians just like manufacturing to the Chinese. Stupidity really.

[husted] 12/8/2021 19:15

Sturgeon's under pressure from the Greens. It's a minority government in Scotland supported by Greens. Greens could bring down her government and Greens want to pull the plug on ALL oil production in North Sea pretty much right away. Fortunately it's up to UK government what happens in North Sea.

A re-think has to be coming anyway. Look at Biden begging Opec+ to produce more oil yesterday. Transition has to happen by cutting demand not pressing oil companies to cut supply. Shortage of supply just leads to high oil prices. Nice for RDS in short term, but risking inflation, recession and poorer people suffering.

[lammergeier] 12/8/2021 17:03

Typical N.Sturgeon,after Boris Johnson had implied that he would not stop the Cambo

Project because the licence was issued so many years ago,she now wants the UK Govt

to reassess the situation .This project would create very useful long term jobs but of

course she wants to get the younger generation on her side for polical votes(we all

know why).Lets hope Boris confirms the project as he recently suggested

[kkclimber56] 12/8/2021 11:45

A bit like BP reducing its emissions by selling parts of the business. Purely reputational and achieves nothing. In fact a bit like UK reducing its emissions by offshoring all its heavy industry to china and then adding to emissions by shipping finished products back.Emissions should be measured according to consumption not production.

[kkclimber56] 12/8/2021 11:42

I worked in finance for Shell in nigeria 30 years ago.Important to appreciate that the $110m settlement will be charged to the joint venture 55% of which is owned by the state oil company and only 30% by shell. The balance is elf and AGIP. The shell/ elf/ ships share will be tax deductible.Bottom line impact on Shell- square root of sod all.

[planit2] 12/8/2021 10:29

This comment from above shows the serious hypocrisy of the rich

'As one of leading advocates of net Zero, Bill Gates helpfully explains in his book “I own big houses and fly in private planes- in fact I took one to Paris for the climate change conference – so who am I to lecture anyone on the environment?” “It’s true that my carbon footprint is absurdly high. .. In 2020 I started buying sustainable jet fuel and will fully offset my family’s aviation missions in 2021. For our non aviation emissions I am buying offsets through a company that runs a facility that removes carbon dioxide from the air”. At least Bill Gates uses his own money to offset that carbon footprint and grasps that others might see it differently.'

This doesn't make him a good person, if he really was worried about climate change he would lower his carbon footprint to that of a 'normal' person and use his money to offset the emissions of another million 'normal' people.

[heialex1] 12/8/2021 10:19

This is worth 2000 all day long. Benefits of higher gas prices will also feed through over the next 6 months

[xxxxxy] 12/8/2021 07:52

Gas boiler ban 'risks increasing carbon emissions' Switch to hydrogen fuel could be more polluting than natural gas or coal, academics warnByRachel Millard12 August 2021 • 6:00amA Government-backed push to heat millions of homes using hydrogen boilers risks increasing carbon emissions and speeding up global warming, a new academic paper suggests, in a blow for Boris Johnson's green agenda.Ministers are scrambling to shore up a key part of the country's net zero carbon strategy after the findings in a peer-reviewed study suggested that even hydrogen produced using allegedly low-emission methods can be more polluting than gas or coal.The research threatens to further jeopardise plans for a block on the sale of new natural gas boilers in the UK from the mid-2030s. It came as the Financial Times reported that the Government is backing away from this ban due to concerns over what it will cost householders.....full article.... Daily Telegraph

[xxxxxy] 12/8/2021 07:51

Let Alok Sharma as chairman and deal maker fly to meetings, but how many others?AUGUST 12, 2021 10 COMMENTS The establishment elite  that perform  the rites and fashion the weapons of the war on carbon are in danger of slipping into the bad practices of some  past priesthoods. The officials and grandees  tell us they need to fly around the world to conferences like COP 26 to spread the word. I can see the case for the chairman of the global conference to meet key players face to face in their own settings  to try to do a deal, but the case for others is by no means clear.  Too many fly around the world to   tell others not to fly but to holiday near to home and to communicate on Zoom or Teams. When challenged about their own lifestyles which seem detached from Mission Net Zero they reply that it is fine because they are "offsetting" all the carbon their flights, chauffeured cars, air conditioned hotels and meat banquets  generate.  In other words they use taxpayers money to grant aid activities like tree planting or renewable power installation to claim a carbon offset.As one of leading advocates of net Zero, Bill Gates helpfully explains in his book "I own big houses and fly in private planes- in fact  I took one to Paris for the climate change conference – so who am I to lecture anyone on the environment?" "It's true that my carbon footprint is absurdly high. .. In 2020 I started buying sustainable jet fuel and  will fully offset my family's aviation missions in 2021. For our non aviation emissions I am buying offsets through a company that runs a facility that removes carbon dioxide from the air". At least Bill Gates uses his own money to offset that carbon footprint and grasps that others might see it differently.I am disappointed that  COP26 is not a virtual conference. The combination of the messaging on jet travel and the wish of many governments to restrict jet travel to stop the spread of covid would seem to make a strong case for a virtual meeting. There will be critics who will not be easily assuaged by knowledge of carbon offsets. There will also be plenty of examination of the nature of those carbon offsets to see if  they are genuine and not being miscounted.The efforts to place a price on carbon are creating inflation in various green investments as well as the more useful boosting of investment in things like trees and renewable power. They are also leading governments into seizing another new way of taxing us, by placing carbon taxes and carbon border taxes on items we need.Governments  need to explain how they will tax non fossil fuels in the world they want where they lose most of the tax on oil and gas.They also need to set out where all the electrical power is coming up   from to fuel the electrical revolution. ....John Redwood

[waldron] 12/8/2021 06:25

European markets head for higher open following gains on Wall Street

Published Thu, Aug 12 20211:05 AM EDT

Holly Ellyatt
@HollyEllyatt


Key Points

European stocks are expected to open in positive territory on Thursday, following gains on Wall Street after the latest U.S. inflation reading.

London’s FTSE is seen opening 17 points higher at 7,202, Germany’s DAX up 29 points at 15,847, France’s CAC 40 up 4 points at 6,861 and Italy’s FTSE MIB 60 points higher at 26,493, according to IG.

[waldron] 11/8/2021 20:10

TOP NEWS: Shell agrees EUR95 million payment over 1970 Nigeria spills

Wed, 11th Aug 2021 19:23
Alliance News

(Alliance News) - Oil giant Royal Dutch Shell PLC has agreed to pay

around EUR95 million to communities in southern Nigeria over crude spills in 1970, the company and the community's lawyer said on Wednesday.

"The order for the payment of N45.9 bln (USD111 million, EUR94.9 million) to the claimants is for full and final satisfaction of the judgement," a local spokesman for Shell Petroleum Development Co of Nigeria said.

Lawyer Lucius Nwosa, representing the Ejama-Ebubu community in Rivers State, confirmed the decision.Â

Shell A shares closed 0.9% higher at 1,490.80 pence each in London, while the B shares rose 0.8% to 1,479.19p.

source: AFP

[waldron] 11/8/2021 18:22

DIVI DATES




Ex-dividend date for RDS A and RDS B August 12, 2021

[adg] 11/8/2021 16:04

thanks - good to know

[tornado12] 11/8/2021 14:38

Up until about 18 months ago B shares were always circa 20-40p higher than A driven by the divi tax on A shares. Since Brexit and collapse of Sterling it went completely the other direct … now Brexit done the pound has strengthened and B shares back more in favour… current gap closing is also driven by the daily buy backs

[adg] 11/8/2021 10:46

Would there ever be a case where RDSB would trade higher than RDSA - can't say i have ever noticed it - gap now only 8p

[unastubbs] 11/8/2021 08:48

ex-div tomorrow