Shell Share Discussion Threads

[la forge] 07/3/2017 13:44

Saudi Aramco to Pay Royal Dutch Shell $2.2 Billion in Motiva Breakup
07/03/2017 11:16am
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Today : Tuesday 7 March 2017
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By Summer Said

State-oil giant Saudi Arabian Oil Co. will pay Royal Dutch Shell PLC $2.2 billion to finalize the breakup of their two-decade Motiva Enterprises refining partnership in the U.S.

The deal gives Saudi Arabia sole control over the largest refinery in the U.S., a 600,000-barrels a day facility in Port Arthur, Tex. The Saudi state oil company, known as Aramco, will take full ownership of the Motiva Enterprises LLC name and legal entity. Saudi Arabia also gets 24 distribution terminals, Aramco and Shell said in a joint statement.

Shell will assume sole ownership of the Norco and Convent refineries in Louisiana as well as 11 distribution terminals.

A key part of the deal was Motiva's $3.2 billion net debt.

In a separate statement, Shell said Saudi Aramco agreed to take on all of the debt, including Shell's $1.5 billion portion, and also make cash payments bringing the total amount paid to Shell to $2.2 billion.

The transaction, which is subject to regulatory approval, is expected to be finalized in the second quarter of 2017.

Harold Hamm, Chief Executive and Founder of oil producer Continental Resources Inc. and an energy adviser to President Donald Trump, has spoken out against foreign takeovers of U.S.-based refineries. Mr. Trump has expressed unhappiness with U.S. reliance on foreign control of fuel manufacturing, though neither he nor Mr. Hamm has directly called for the Motiva breakup to be stopped.

The deal unwinds a two-decade partnership between Shell and Aramco in the U.S. The two companies spent $10 billion to double the size of the Port Arthur, Tex. plant in 2012, making it the largest refinery in the U.S.

A significant portion of the gasoline, diesel and jet fuel produced there every day is exported to overseas markets.

Write to Summer Said at [e-mail]



(END) Dow Jones Newswires

March 07, 2017 06:01 ET (11:01 GMT)

[zho] 07/3/2017 07:38

Saudi Arabian Oil Co. will pay Royal Dutch Shell Plc $2.2 billion including debt to finalize the breakup of a 19-year refining partnership known as Motiva Enterprises LLC.

[waldron] 06/3/2017 18:35

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With oil prices remaining relatively low and shale production picking back up, U.S. energy security appears relatively stable, but the current situation isn’t going to last forever.

The International Energy Agency (IEA), in its latest Medium-Term Oil Market Report, released Monday, broadcasted dire warnings, suggesting that the market will tighten considerably after 2020, with sharp price spikes and increased volatility—despite continued rapid growth in shale.

The IEA says the market will tighten considerably after 2020, with sharp price spikes and increased volatility—despite continued rapid growth in shale.

Speaking at a press conference at IHS CERAWeek in Houston, IEA Executive Director Fatih Birol emphasized the importance of increasing upstream while also taking demand-side measures to cushion against the looming market crunch. “For U.S. energy independence, as much as one wants to see domestic production growth…efficiency is also part of the game,” Birol told reporters in response to a question about the possibility of the U.S. government easing fuel economy regulations.

“For U.S. energy independence, as much as one wants to see domestic production growth…efficiency is also part of the game.”

In the agency’s reference scenario, it forecasts global supply rising by some 5.6 million barrels per day (mbd) over the next five years, but demand increasing by a higher amount—7.3 mbd. Against this backdrop, global spare production capacity will decline “big time,” Birol said, putting it at dangerous levels, close to levels in 2008, when prices spiked to $147 per barrel.

Peak demand—forget about it

Birol emphasized that oil demand will not peak anytime soon, despite numerous reports that fuel efficiency standards and alternative vehicles will slow growth and ultimately cause consumption to decline.

In a reflection of the challenges the global oil market will face in the coming years, some one-third of demand growth will come from trucks in Asia. For this portion of the transportation sector, there is no immediate substitute. The jet fuel and petrochemical markets, where also a good portion of demand growth will occur, lack substitutes, too. With that in mind, the enthusiasm surrounding shifts in transportation should be kept in check. Oil demand is expected to pass the significant threshold of 100 mbd in 2018.

Not enough investment outside the US

While demand will put pressure on prices, so will lack of investment on the supply side. Birol said investment is currently 25 percent lower than what it needs to be in order to meet rises in demand and offset declines in current fields. The one bright spot, U.S. shale, should keep the market in check for the next couple of years, but limited outlays over the past few years during the current price slump will eventually bit.

Investment is currently 25 percent lower than what it needs to be in order to meet rises in demand and offset declines in current fields.

Of the growth expected over the next five years, roughly 30 percent will come in the U.S. The IEA sees U.S. crude oil supply rising by 1.6 mbd over the next five years. “We are now witnessing a second wave of U.S. shale growth,” Birol told reporters, noting how U.S. light, tight oil is the only area that can respond swiftly to prices rises—as is the case now. U.S. shale is back to 9 mbd after falling to 8.5 mbd last year.

Despite shale’s growth, there is a “significant risk of prices rising sharply starting 2020, unless significant new projects are sanctioned soon.” Outside of the U.S., the biggest growers will be non-OPEC suppliers Brazil and Canada, as a result of projects sanctioned before the price fall. In OPEC, Iraq will see the largest gains. Birol’s main worry is that the call on OPEC crude—the amount needed to balance the market—will rise in comings years without enough upstream investment. This situation will create different trade flows, with Brazil and Canada sending volumes to Asia, the region seeing the largest demand growth, in order to fill the gap. “Trade routes will lengthen as Asia needs more oil but the Middle East can’t meet it,” said Birol.

“Trade routes will lengthen as Asia needs more oil but the Middle East can’t meet it.”

It’s not all doom and gloom—yet. For the next couple of years, the market looks to be well supplied with strong non-OPEC growth and inventories—despite falling—remaining above the five-year average. Furthermore, in a case where oil trades at $80 per barrel, U.S. light, tight will increase by an enormous 3 mbd in the next five years, almost double the base case scenario. Still, looking further out, the IEA is envisioning a completely different market than the one we see today.

[waldron] 02/3/2017 14:46

Dutch court rules gas company liable for emotional suffering
Wednesday 1 March 2017 at 12:20 PM ET by Autumn Callan
fracking
© WikiMedia (The Pinedale Field office of the BLM.)

[JURIST] A Dutch court in the northern city of Assen ruled [order, in Dutch] Wednesday that the Netherlands Petroleum Company (NAM) [corporate website] is liable for the emotional suffering of claimants whose homes were damaged from earthquakes caused by drilling. NAM is jointly owned [AP report] by ExxonMobil and Shell [corporate websites]. The complaint involves 127 plaintiffs who are seeking financial compensation for non-material damage. The court said that the regular earthquakes created a "serious breach by the NAM on fundamental personal rights, the right to an undisturbed enjoyment." The earthquakes caused many to be afraid for their safety and led to "tensions" that impacted daily life. The court also stated that the nuisance created by NAM exceeds "normal" nuisance in its nature, severity and duration. An action was also raised against the state for negligence, but the court found that they were not liable for damages despite their reluctance to minimize gas production. The amount of compensation for the 127 plaintiffs will be decided in a follow-up procedure.

The environmental impact of natural gas production, particularly hydraulic fracturing, or fracking [JURIST backgrounder] has been controversial around the world. The Dutch Council of State in November ordered [JURIST report] more cuts in gas production. In September a Dutch court ruled [JURIST report] that the Royal Dutch Shell and Exxon Mobil joint venture must pay homeowners for property damage caused by gas drilling related earthquakes. In June New York implemented a ban [JURIST report] on the practice. In March the Maryland House of Delegates passed a bill [JURIST report] to place a three-year moratorium on fracking in the state. Also in March US Secretary of the Interior Sally Jewell announced [JURIST report] the publication of a rule regulating fracking on federal land. In January Scotland announced [JURIST report] a moratorium on the granting of permits for unconventional oil and gas extraction, including fracking amid environmental and health concerns.

[waldron] 01/3/2017 08:42

Shell makes a big splash with brash Brent trades

Energy major’s more aggressive approach to the physical, forward and financial contracts for North Sea crude has been viewed in certain quarters as tantamount to the manipulating the market
Published: 11:33 March 1, 2017
Gulf News
By Laura Hurst and Javier Blas


The giant tankers anchored along the Scottish coast in the Firth of Forth weren’t going anywhere. They were just providing floating storage because there was no demand for their cargo, North Sea crude oil.

But the flickering computer screens in the world’s trading rooms told a different story. Prices through the month of April were jumping, showing someone was buying, stunning traders and leaving some with heavy losses. That wasn’t the only bizarre gyration last year in the market for Brent, whose price determines the cost of just about every petroleum-based product, from jet fuel to plastic spoons.

Such unusual moves damaged confidence so much that some traders retreated from the market.

The buyer on virtually all those occasions was Royal Dutch Shell Plc, according to interviews with two dozen industry executives and data compiled by Bloomberg. Last year, Shell dominated Brent trading to such an extent that it moved the market even against the fundamentals of global supply and demand. Shell said in a statement there was no basis for competitors to criticise its behaviour.

Better known for its oilfields and refineries, Shell is also the world’s largest oil trader, handling contracts that exceed the needs of its core business and enabling it to make speculative bets in dozens of markets. With Wall Street-like operations from London to Singapore, Shell trades over 12 million barrels per day of physical crude and refined products — more than a 10th of the world’s oil consumption — and “several multiples of that as derivatives”, according to a Shell presentation.

While none of those interviewed said Shell did anything illegal, they said the company violated the unspoken rules governing the market, which is lightly regulated. Executives of several trading rivals, including Vitol Group BV, the world’s top independent oil merchant, raised objections with counterparts at Shell last year, according to market participants.

“There are clearly defined rules and regulations in the UK prohibiting the manipulation of physical commodity markets such as the Brent crude market,” Shell said in its statement. The company said it complies with all the market’s rules and regulations.

The strife centres on one of the most important, albeit arcane, corners of the oil market: the complex layers of physical, forward and financial contracts for North Sea oil that make up what outsiders refer to simply as Brent.

Although North Sea oil output has been declining for more than a decade — falling to 2.8 million barrels a day, down from nearly 6 million barrels a day in 2004 — Brent is still the world’s most important industry reference.

The benchmark is a mix of four varieties of crude — Brent itself, Forties, Oseberg and Ekofisk, together known by their initials: BFOE. Of the four, Forties is the most important because it has the largest output. Shell built significant positions in Forties crude through last year, at times accumulating the majority of the crude available in any given month, both buying from third-parties and retaining its own production, according to data compiled by Bloomberg.

The Anglo-Dutch giant made its highest profile move in April, when it secured at least 16 cargoes — each of about 600,000 barrels, or the standard size of a North Sea tanker — of Forties, equivalent to nearly 70 per cent of the total cargoes available, according to data compiled by Bloomberg. That position gave it a strong influence in the daily price of the BFOE basket and, by extension, of the Brent universe of physical and financial contracts.

As Shell bought the crude, rivals scrambled to cover their own positions. Despite a glut in the global oil market, the price of Brent rose in April as if there were a shortage.

The difference between the June and July contracts — the most traded at the time — exploded from minus 70 cents to plus 99 cents — a huge swing in just four weeks. The 170-cent per barrel turnaround was striking in a market where typical fluctuations are 5 cents to 10 cents.

In other niches of the Brent market, including the so-called contracts for difference, which allow physical traders to hedge risk, there were also large price swings.

The premium the market was demanding for immediate delivery was at odds with what traders could see: dotting the Scottish waters off Edinburgh were tankers at anchor. While Brent contracts briefly flashed a shortage, other international benchmarks, including West Texas Intermediate and Dubai, remained unaffected, signalling global oversupply.

As soon as the June contract expired, the market returned to normal: the shortage had been a mirage — oil was plentiful.

While largely unknown outside the industry, physical oil trading is a multibillion-dollar business that can make money regardless of whether prices rise or fall. For major energy companies such as BP Plc, Total SA and Shell, trading profits provided a cushion the past two years as crude prices declined to the lowest in 12 years.

At Shell, a new generation of oil traders dealing with Brent — led by Tarek Al Hassan and Yuan Dong — adopted a more aggressive strategy, according to people familiar with the matter and rival traders. The shift highlights how Shell embraced risk-taking during the past five years under Mike Conway — the departing head of its trading business — and Mike Muller, in charge of oil trading.

Previously, Shell was seen by rivals as a timid trader, unlikely to take big positions.

Shell built large positions in Forties at least two more times in 2016, after April, although the impact in the market was smaller, according to data compiled by Bloomberg.

In the aftermath of the April trades, some big oil traders — including Trafigura Group — reduced their exposure to some North Sea markets to avoid being wrong-footed, according to people familiar with the matter.

While rivals complained to Shell, the oil giant saw its trading patterns as business-as-usual. It was simply securing enough Forties crude to supply its own refineries and clients in Asia, according to people familiar with the company’s strategy.

Shell sold in Asia more than 35 million barrels of North Sea crude last year — up from around 6 million barrels in 2015 — according to ship-tracking and fixture data compiled by Bloomberg.

The saga reflects complaints over the Brent benchmark itself: dwindling North Sea output has reduced the amount of BFOE cargoes available, making the contract more vulnerable to traders building up big positions. S&P Global Platts, the pricing agency that oversees the Brent physical market, has said it will add a new stream — Norwegian Troll crude — in January 2018, increasing the volume of the current BFOE basket by about 20 per cent.

The industry is discussing adding more streams in the future, even from as far away as Africa.

“The benchmark needs to continue to evolve,” said David Peniket, the president of the ICE Futures Europe exchange where Brent trades.

[waldron] 26/2/2017 16:32

Upcoming events
Date Event
May 4, 2017 First quarter 2017 results and first quarter 2017 interim dividend announcement

[maywillow] 24/2/2017 21:11

24 February 2017 - 21H40
Shell plans $300 mn investment in Argentina shale

inShare

© AFP/File | Argentina oil company YPF said in a statement it would partner with the Anglo-Dutch company Shell to exploit the huge Vaca Muerta reserve
BUENOS AIRES (AFP) -

Shell has confirmed it will invest $300 million to develop a shale oil and gas reserve in southern Argentina, executives said Friday.

Argentina oil company YPF said in a statement it would partner with the Anglo-Dutch company Shell to exploit the huge Vaca Muerta reserve.
PUBLICITÉ

Exploration of the field has yielded "excellent results," it quoted Shell Argentina boss Teofilo Lacroze as saying.

US and French firms are among the other international companies working on exploiting the 30,000 square kilometer (12,000 square mile) reserve.

[grupo] 24/2/2017 10:28

Closing of scrip election and currency March 3, 2017
election (See Note)

Pounds sterling and euro equivalents March 10, 2017
announcement date

Payment date March 27, 2017

[garycook] 22/2/2017 13:39

FJ,Great post.Yes Motley Fool,take them with a pinch of salt.

[fjgooner] 22/2/2017 12:34

Yawn. Royston yet again. Signals next step up to £25.

Re: : Royston Wild has no position in any shares mentioned.

That may well be true, but he certainly seems to have a determination to post relentless negative articles on Shell every few days, all year long. Have a look at:



Here are a few typical Royston Wild headlines from 2016, but there are many, many more to choose from the link posted above - enjoy.

I've included the Closing Price of Shell to give you an idea of how helpful his advice has been so far this year if the casual investor had taken it.

RDSB Shareprice today: £21.80

60% higher than when he posted his classic "I believe investors should resist attempting to pick up a bargain" when the RDSB Shareprice was at £13.51.

That is why I personally choose to never take his opinion on Shell as anything other than comical.

Best regards,

FJ

-------------------------

Why Now May Be The Time To Sell Anglo American plc, Tesco PLC & Royal Dutch Shell Plc
By Royston Wild - Thursday, 14 April, 2016
RDSB Shareprice was at £18.13

Why I Wouldn’t Touch Royal Dutch Shell Plc & Tullow Oil plc With A Bargepole!
By Royston Wild - Friday, 8 April, 2016
RDSB Shareprice was at £17.40

Can 1st Quarter Winners Royal Dutch Shell Plc (+10%), Unilever plc (+8%) & KAZ Minerals PLC (+67%) Keep Climbing?
By Royston Wild - Friday, 1 April, 2016
RDSB Shareprice was at £16.83

Is It Finally Time To Give Up On Royal Dutch Shell Plc?
By Royston Wild - Thursday, 24 March, 2016
RDSB Shareprice was at £16.88

Is Royal Dutch Shell Plc In Danger Of A Colossal Correction?
By Royston Wild - Thursday, 17 March, 2016
RDSB Shareprice was at £17.38

Why Royal Dutch Shell Plc’s Dividend Outlook Should Scare You
By Royston Wild - Thursday, 10 March, 2016
RDSB Shareprice was at £16.41

Are Lloyds Banking Group PLC & Royal Dutch Shell Plc REALLY Great Value?
By Royston Wild - Monday, 29 February, 2016
RDSB Shareprice was at £16.45

When Will Shares In Royal Dutch Shell Plc Finally Reach Bottom?
By Royston Wild - Wednesday, 17 February, 2016
His comment: I believe much further trouble is in store for Shell looking ahead and expect shares to keep on falling.
RDSB Shareprice was at £16.36

Royal Dutch Shell Plc & Vodafone Group plc: Value Titans Or Value Traps?
By Royston Wild - Tuesday, 9 February, 2016
RDSB Shareprice was at £14.61

Why Royal Dutch Shell Plc Shares Could Easily Topple Another 15%!
By Royston Wild - Friday, 29 January, 2016
His comment: A subsequent re-rating of Shell’s share price would leave the oil leviathan dealing at £12.80 per share, representing a vast 15% reduction from current levels. But even this projection be considered optimistic, in my opinion.
RDSB Shareprice was at £15.21

Why Buying BP plc & Royal Dutch Shell Plc Is Utter Madness!
By Royston Wild - Friday, 15 January, 2016
His comment: I believe investors should resist attempting to pick up a bargain.
RDSB Shareprice was at £13.51

Royal Dutch Shell Plc & GlaxoSmithKline plc: Brilliant Bargains Or Value Traps?
By Royston Wild - Friday, 8 January, 2016
His comment: I believe Royal Dutch Shell (LSE: RDSB) can be considered a bona-fide value trap at the present time.
RDSB Shareprice was at £13.75

[waldron] 22/2/2017 07:27

Why I think Royal Dutch Shell plc should be dealing 33% lower
A Shell fuel nozzle
Photo: Royal Dutch Shell. Fair use.
Royston Wild | Wednesday, 22nd February, 2017 | More on: RDSB

0
inShare

Signs that the oil market’s enduring material surplus may take longer to erode than hoped-for following OPEC’s landmark output freeze in November have seen Royal Dutch Shell (LSE: RDSB) retreat from January’s highs around £23.80 per share.

Indeed, the energy giant is now dealing 8% lower to those three-year peaks. But I believe the company’s share price should still be dealing much, much lower.

The City expects earnings at Shell to explode 93% in 2017, resulting in a P/E ratio of 15.2 times. But I reckon expectations of such an electrifying rise remain on very shaky ground, given that a healthy uptick in barrel values is needed to make these forecasts a reality.

I believe a forward P/E ratio of 10 times, anchored on the watermark reflective of stocks with high risk profiles, is a fairer reflection of Shell’s bottom-line prospects.

And a subsequent share price re-rating would leave the crude colossus dealing at £14.37 per share, representing a stunning 33% discount to current levels
Supply Swells

Investor sentiment has been influenced by a relentless rise in the US rig count since late last year, with recent Baker Hughes numbers showing the number of units hitting fresh 16-month peaks last week, at 597.

But exploding output in the States is not the only barrier to Shell’s earnings recovery as production levels leap elsewhere.

In Brazil, for instance, state-owned producer Petrobras pulled a record 2.3m barrels of the black stuff out of the ground on average in December, taking out the previous record of three months earlier. Although production stepped back last month due to scheduled maintenance, average pre-salt production hit an all-time peak of 1.34m barrels per day.

Investment in Canada’s fossil fuel industry is also driving output here to the stars. Indeed, latest export numbers from the National Energy Board showed crude exports averaged 538,089 cubic metres per day in November, surging from 485,863 metres in the prior month.

Data from Baker Hughes last week also showed that 194 oil rigs were churning material out of the ground last week, almost double the number of units seen a year ago and suggesting that production levels should keep on climbing.
Risky Business

Oil prices received a fillip on Tuesday after OPEC Secretary General Mohammed Barkindo said the group is aiming to keep the compliance rate on an upward bent. The cartel saw conformity with autumn’s agreed production quota hit an impressive 90% last month.

But whether or not the group can keep the rate rising in the months ahead, the viability of November’s deal lasting beyond the summer deadline will be hotly contested by many members seeking to ramp up their own production.

A failure to extend the accord could prove catastrophic for oil prices as rising production elsewhere already threatens to keep global crude inventories at bursting point. US stockpiles struck a fresh record of 518m barrels last week, and are broadly expected to hit new highs when the EIA reports again this week.

Clearly claims of a balanced oil market remain very much in the air, and with it a meaty earnings bounce at the likes of Shell. Given the murky supply and demand indicators still washing over the energy sector, I believe investment in the oil major is still extremely risky at present, and particularly at current share prices.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Royal Dutch Shell B. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

[waldron] 21/2/2017 07:47

Business News

Home > Business > Business News

Tuesday, 21 February 2017
Shell shakes up oil trading world

by laura hurstandjavier blas

image:
More buying: While none of those interviewed said Shell did anything illegal, they said the company violated the unspoken rules governing the market, which is lightly regulated.

More buying: While none of those interviewed said Shell did anything illegal, they said the company violated the unspoken rules governing the market, which is lightly regulated.

Read more at

[waldron] 20/2/2017 22:06

sitted at 2175 now its down towards 2075 for the next 8 weeks or so


some might say a nice buying opportunity that comes once a quarter

[discodave4] 20/2/2017 19:00

Doubt it's heading to £20 but wtfdik.Support 2145-2148.Will see.DD

[supermarky] 20/2/2017 16:44

Shell seems to be sitting on major trend line support. Interestingly bp has already gone south of trend line support. Is shell really heading back down to the clear double bottom 2000 area? Stochastic looks oversold daily. Rsi also heading to 30. Below 50 and 100 ma. Obviously trading xd so weak. Oil once again testing upper area of clearly defined range.