Shell Share Discussion Threads

[pvb] 12/6/2016 09:29

rburtn 1 Jun'16 - 08:23 - 450 of 472
...
Climate Change is real but it happens to be because we are coating the earth's landmass with concrete and slate - we are doing a Goldfinger on earth's sweat pores.

Nonsense. The Earth doesn't have "sweat pores" and indeed Goldfinger's sweat pores were themselves a myth! And what proportion of the Earth's climate system (land + atmosphere + ice caps + oceans) consists of "concrete and slate"?

The distortion of vapour production is re-distributing energy northwards (most urban spreads are in the northern hemisphere) and simple maths says earth's average T will rise.

"simple maths" says if you just redistribute a fixed quantity amongst components the "average" is unaltered.

The GHG effect is a myth and defies the Laws of Thermodynamics.

And pray which "Laws of Thermodynamics" are being defied?

[grupo] 10/6/2016 06:18

Oil Prices Climb Higher on Expectation of Waning Supply
June 09, 2016, 11:44:00 PM EDT By Dow Jones Business News



Comment

Shutterstock photo

By Jenny W. Hsu

Crude oil prices moved higher in early Asian trade Friday as the latest decrease in U.S. crude stockpiles and continuing supply outages strengthen the view that the oil market is veering towards a deficit.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in July last traded at $50.79 a barrel, up $0.43 in the Globex electronic session, while August Brent crude on London's ICE Futures exchange was up $0.50 at $ 51.94 a barrel.

Unplanned supply outages in recent months wiped out more than 3.6 million barrels a day in May, the highest monthly level recorded since the EIA started tracking global disruptions in 2011.

"From April to May, disruptions grew by 0.8 million barrels a day as increased outages, largely in Canada, Nigeria, Iraq, and Libya, more than offset reduced outages in Kuwait, Brazil, and Ghana," the agency says, but notes the outage will start to wane as Canada has gradually restarted its oil operations.

The shrinking global supply reinforces expectation that the global oil market is rebalancing, analysts said. Although inventories of crude and refined products remain very high, supplies outside of the Organization of the Petroleum Exporting Countries is ebbing.

"Based on this, as well as solid global demand, we anticipate slight global stockdraws in the second half of this year, and significantly bigger global stockdraws next year," said Societe Generale in a note. It estimates global demand to growth at 1.3 million barrels a day this year and 1.4 million barrels a day in 2017, mainly driven by China and India.

In May, China's crude imports rose 7.9% on-year to 7.6 million barrels a day. For the first three months of the year, India's refined fuel consumption surged by 10% on-year to 4.35 million barrels day, according to the International Energy Agency.

Investors are watching how U.S. shale producers will react to the higher prices. Some analysts are of the view that as China continues to pump out more products, refining margins will shrink as the region faces a glut of products. This would likely result in a deceleration in China's oil import.

"With crude prices consolidating over the $50 support level and increased competition between Asian refiners for exports, it is hard to get very bullish on Chinese demand or refining margins," said John Driscoll, director of the Singapore-based JTD Energy Services and a former oil trader.

Market participants will be watching the weekly U.S. oil-rig count from industry group Baker Hughes Inc. later today. Last week, U.S. rig count increased by nine.

"While it is still well short of what is required to maintain U.S. output at current levels, any further increase could dampen the market's expectations of declines in U.S. production," said Daniel Hynes, senior commodity strategist at ANZ Research.

Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 9 points to $1.6177 a gallon, while July diesel traded at $1.5507, 5 points lower.

ICE gasoil for June changed hands at $459.25 a metric ton, down $0.25 from Thursday's settlement.

Write to Jenny W. Hsu at [e-mail]


(END) Dow Jones Newswires
06-09-162344ET


Read more:

[grupo] 09/6/2016 19:32

LONDON: Oil prices fell on Thursday as traders took profits after three sessions of gains and after reaching 2016 highs thanks to a fall in US crude inventories and supply disruptions.
Brent crude oil futures were down 90 cents a barrel at $51.61 a barrel at 1316 GMT, after setting a 2016 high of $52.86.
US crude was down by 91 cents at $50.32 after hitting a 2016 high at $51.67.
A rebounding US dollar also weighed on prices.
“If you look at the week behind us ... there was support for commodities from the currency side, the equity side, and the emerging markets side,” said Bjarne Schieldrop, chief commodity analyst at SEB.
“We see some reverse of that now,” he added.
A fall in the dollar against a basket of currencies to a five-week low on Wednesday boosted oil prices, but the index recovered on Thursday, standing up 0.47 percent at 1315 GMT.
A weaker dollar makes oil cheaper for holders of other currencies.
Oil prices also gained ground after data on Wednesday from the US Energy Information Administration (EIA) showed US crude stocks last week fell by 3.23 million barrels, while inventories of gasoline and middle distillates rose.
Supply outages in Nigeria and Canada have also supported oil prices.
Consultancy Energy Aspects estimates fire-hit Canadian output losses will total 29 million barrels across May and June “after adjusting for turnaround work that was underway before the wildfires broke out, and assuming a pre-wildfire utilization rate of 85 percent of (the 2015 average).”
Nigeria’s Niger Delta Avengers militant group on Wednesday rejected an offer of talks with the government to end its attacks on oil facilities and said it had blown up a Chevron pipeline site.
But some analysts said there are signs that downward pressure on prices is mounting.
ANZ bank said price rises were “tempered by an increase in (US) crude production of 10,000 barrels per day to 8.75 million barrels per day and the number of active rigs increasing by 9 to 325.”
Traders also said refined product stocks were building up in the United States and Asia.
Many traders and analysts say a price of $50-60 per barrel may be fair value. This is reflected in Brent’s forward curve, which stays within that range until early 2021.

[maywillow] 08/6/2016 20:04

Shell Gives Up Nearly 40-Year Fight for Expired Arctic Permits, Opening Up Conservation Area

By Carol Linnitt • Wednesday, June 8, 2016 - 11:27
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Canadian conservation groups are celebrating the proposed creation of an Arctic marine conservation area in Lancaster Sound, a region long-threatened by the possibility of exploratory oil and gas drilling.

Shell Canada first applied for exploration rights in Lancaster Sound in 1971 and although the related permits were set to expire by 1979 and despite a moratorium on drilling in the region, they inexplicably remained listed on the public registry of active permits.

Those permits, which granted Shell offshore rights in the waters of Baffin Bay, frustrated a decades-long fight to protect the biodiversity rich Lancaster Sound, an area famous for its large populations of narwhal, beluga, walrus and polar bear.

In April Ecojustice on behalf of the World Wildlife Federation (WWF) filed a suit against Shell Canada and the federal government. Ecojustice maintained the expired permits, whose geographical boundaries overlapped proposed protected areas, should be struck down.

On the eve of World Oceans Day, Shell Canada announced it was voluntarily releasing the permits and granted the land to the federal government via the Nature Conservancy of Canada. The federal government in turn announced a five-year plan to establish more ocean protections including the creation of the Lancaster Sound Marine Conservation Area.

Canada is far behind other western nations when it comes to ocean protection. According to the Canadian Parks and Wilderness Society, only 0.11 per cent of Canada’s ocean area is protected from industrial activity. Canada recently announced a plan to raise that figure to 10 per cent, which would bring the country in line with conservation benchmarks achieved in the U.S. and the U.K.

Devon Page, executive director of Ecojustice, said today’s announcement “is an important step towards preserving Lancaster Sound’s incredible biodiversity, and acknowledging the traditional knowledge of the Inuit communities who live in the area.”

The Qikiqtani Inuit Association proposed boundaries for a marine conservation area based on traditional knowledge of the land. Successive federal government refused to draft marine conservation plans that aligned with local Inuit boundaries because of Shell’s permits in the proposed zone.

Page said “the government now has the opportunity to propose new boundaries for the Lancaster Sound National Marine Conservation Area that would align with the boundaries proposed by the Qikiqtani Inuit Association.”

In a previous interview Page said the fact that climate change is opening up the Arctic to oil exploration is a “troubling irony.”

“We need to do whatever we can to stop full-scale exploration of the Arctic,” he said, adding that despite major international climate treaties like the Paris Agreement “you can see no change in behaviour from the oil industry.”

David Miller, executive director of WWF, said having a marine sanctuary in Lancaster Sound has been a goal of his organization for many years.

“Lancaster Sound is an incredibly ecologically rich area: it’s rich from the perspective of those who value nature as a critical part of our world that we need to support. It’s also rich from perspective of local people who get their sustenance and basic way of life from the same natural bounty that is there,” Miller told DeSmog Canada in an April interview.

“As the arctic warms quite rapidly we really need to preserve areas like Lancaster Sound and conserve them so ice-dependent species — which will have areas with less lengthy sea ice — will have chance of surviving.”

“There’s not question that climate change is opening up the Arctic to exploration that couldn’t have been dreamed of 15 years ago — not just oil and gas but any resource development on an industrial scale,” Miller said.

“From an environmental perspective the existence of potentially active permits adjacent to or within boundaries to marine conservation area creates huge obstacle to the potential for creating marine conservation areas.”

Ian Miron, staff counsel with Ecojustice said the legal challenge was “certainly not the first step in this process.”

The government failed for years to explain why the permits were being treated as valid, Miron told DeSmog Canada.

“These permits are under the jurisdiction of Indigenous and Northern Affairs Canada,” he said. “On their face the permits were scheduled to expire in 1979.”

Image: Lancaster sound. Photo: Christopher Debicki via Pew Charitable Trusts

[maywillow] 08/6/2016 19:22

Oil prices rise despite US stockpile data on China demand and Nigerian production problems
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Billy Bambrough

Billy Bambrough is City A.M.'s deputy news editor.
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Spindletop Oil Well Centennial
Oil prices have been gushing for three days now (Source: Getty)

Oil prices have risen for a third consecutive day today, hitting eight month highs.

The rise is in spite of US data showing a surprise build in petrol stockpiles. On-going production problems in Nigeria, as well as a better outlook for demand in China spurred on the market.

Gasoline stocks added one million barrels. Analysts had pencilled in a fall.

Inventories of crude oil in the US however fell by more than analysts had expected dropping by 3.2m barrels, over forecasts of 2.7m, in the week to 3 June.

Read more: Oil just gained market share for the first time since 1999 - here's why

Brent crude climbed to $52.35, while West Texas Intermediate hit $51.13. The gains boosted the FTSE 100, which scored its fourth consecutive day of gains.

In China crude oil imports hit their highest in more than six years in May. In Nigeria the Niger Delta Avengers militant group attacked the county's Chevron oil well.

The oil price continues to climb despite US shale production still holding up far better than many had expected, and the former oil cartel Opec tearing itself apart over production disagreements.

Craig Erlam, senior market analyst at Oanda, said:

It would appear that the rebalancing of the oil markets is very much underway, the only questions now are how temporary these supply disruptions are and how high prices can go.

While I do think WTI could continue to grind higher for now, I do think it’s going to find significant resistance around $54.50-55. A move above this level would be quite bullish.

It will be interesting to see if the EIA crude inventory figures confirm yesterday’s API release, which could be the catalyst for further gains in oil later on today.

[waldron] 08/6/2016 09:15

sitting again nicely in the 1775 to 1875 BOX

[waldron] 08/6/2016 09:14

Oil major aims to maintain dividend after $50 billion BG Group buy

By Selina Williams

LONDON -- Royal Dutch Shell PLC said Tuesday it is planning new spending cuts to keep up its dividend payments after spending about $50 billion to buy rival BG Group PLC during the depths of an oil-price rout.

In the combined company's first strategy presentation, Chief Executive Ben van Beurden raised the Anglo-Dutch oil giant's estimate for the cost savings achievable through the integration of BG.

Mr. Van Beurden also cut Shell's planned investment in big new projects through the end of the decade and reiterated the company's intention to sell some properties in a plan to "reshape Shell into a more focused and more resilient company."

The emphasis on cost-cuts -- which comes after several rounds of layoffs over the past year -- highlights Shell's caution over a potential oil-price recovery.

After trading at more than $100 a barrel in 2014, a global oil glut drove prices down to about $27 a barrel in January. Shell and other big oil companies responded by slashing staff and delaying or canceling big projects.

The oil price has since recovered to around $50 a barrel, but Shell is continuing to advertise a frugal outlook to investors -- what Mr. van Beurden on Tuesday called a "lower forever mind-set."

Mr. Van Beurden said Shell will achieve pretax cost savings of $4.5 billion in 2018 as a result of the merger with BG, up from its previous target of $3.5 billion.

Shell also lowered its planned capital investment for this year by $1 billion to $29 billion. From 2017 to the end of the decade the company will keep its capital spending in a range of $25 billion to $30 billion a year, the CEO said, and possibly lower if oil prices don't go up much. He did say that Shell plans to continue investing in deep water oil projects -- an expensive but potentially lucrative area.

Mr. Van Beurden is under pressure to reduce Shell's net debt, which grew to nearly $70 billion after the BG acquisition. The CEO staked his reputation on the deal, which he intended to bolster Shell's focus on liquefied natural gas -- a fast-growing market as some countries are attempting to replace coal with gas -- and deep water oil projects.

But some investors have panned the deal as a lavish buy during a period of low oil prices. Standard Life Investments voted against the transaction, saying it would decrease Shell's value because of the risk of lower oil prices and tax and operational risks surrounding BG's Brazilian oil fields.

Shell said in the strategy update that it would reduce investments in its integrated gas division, which includes the liquefied gas operations, and focus on deep water oil fields such as those in Brazil, which were acquired in the BG merger, and the Gulf of Mexico.

Shell said its daily deep water oil production could double from 2015 levels to around 900,000 barrels of oil and equivalent natural gas volumes in 2020.

In addition to deep water crude, Mr. van Beurden, a veteran of Shell's petrochemical operations, said new chemicals facilities are a growth priority. He said Shell had decided to move ahead with a multibillion-dollar plan to build a major plant near Pittsburgh that will use gas from nearby shale fields as its feedstock. The company didn't give an investment figure for the plant.

Construction will start in around 18 months, with startup slated early next decade, the company said. It has also invested recently in expanding a Louisiana plant and adding to a petrochemical complex in China.

Pouring more money into chemicals now "strengthens our competitive advantage," said Graham van't Hoff, Shell's executive vice president for global chemicals.

Beyond 2020, Shell said it would focus on developing shale production in North America and Argentina and low-carbon energy such as biofuels, solar and wind power.

--Rory Gallivan contributed to this article.

Write to Selina Williams at [e-mail]



(END) Dow Jones Newswires

June 08, 2016 02:48 ET (06:48 GMT)

[waldron] 07/6/2016 15:51

Royal Dutch Shell to Build Petrochemicals Plant in Pennsylvania, US
07/06/2016 11:28am
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Tuesday 7 June 2016
Click Here for more Shell A Charts.

By Ian Walker



LONDON--Oil giant Royal Dutch Shell PLC (RDSB.LN) said Tuesday it plans to build a major petrochemicals plant, comprising an ethylene cracker with polyethylene derivatives unit, near Pittsburgh, Pennsylvania, U.S.

Main construction will start in 18 months, with commercial production expected to start early in the next decade, Shell said. A cracker plant breaks down large molecules from oil and natural gas into smaller ones and an ethylene cracker produces base petrochemical building blocks, which are the first stage in the chemicals manufacturing chain.

The new complex will use low-cost ethane from shale gas producers in the Marcellus and Utica basins to produce 1.6 million metric tons of polyethylene a year, Shell said. Polyethylene is used in many products, from food packaging and containers to automotive components.

The project will bring new growth and jobs to the region, with up to 6,000 construction workers involved in building the new facility, and an expected 600 permanent employees when completed, Shell said.



-Write to Ian Walker at [e-mail]; @IanWalk40289749



(END) Dow Jones Newswires

June 07, 2016 07:13 ET (11:13 GMT)

[waldron] 07/6/2016 15:24

Shell focus shifts to new LNG-import markets amid US$30 billion asset sale

Tue 07 Jun 2016 by Karen Thomas

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Shell focus shifts to new LNG-import markets amid US$30 billion asset sale
Ben van Beurden: Shell “will have fewer projects under way at any one time”

Royal Dutch Shell has pledged to nail down its costs and to shift the focus of its integrated gas business away from exploration and approving new projects and towards developing new LNG-import markets, chief executive officer Ben van Beurden announced today.

A hundred days into its takeover of BG, the company has pledged to focus on synergies as it absorbs the company’s staff and assets, to mitigate continued low oil prices. Mr van Beurden aims to save US$4.5 billion from integration, revising the previous US$1 billion target. He also pledged to achieve some US$30 billion in asset sales to 2018.

Thanks to the BG acquisition, Australia, the US and Brazil account for half the Shell oil and gas portfolio, Mr van Beurden said. He plans to “focus on these three major countries and on 10 other countries that can deliver longevity” in oil and gas, but to exit countries whose reserves are about to mature.

“The combination of the downturn and our recent acquisition of BG is an opportunity to realise a lower cost structure – we will have fewer projects under way at any one time,” Mr van Beurden told journalists at the Shell Capital Markets Day in London this morning.

Thus far, Shell has cancelled or divested from Arrow Greenfield LNG, Elba LNG, US GTL, Wheatstone LNG and the MLNG Dua joint venture. As it reduces its project flow, it plans to delay or defer its Australia-based Browse LNG project and the North American projects LNG Canada and US-based Lake Charles. It will take a final investment decision on Sakhalin Train Three in Russia – but not before 2017.

Shell expects oil prices to remain in the low US$40s per barrel this year and not to head north of US$60 per barrel until 2018. By nailing down expenditure and unearthing cost-saving opportunities as it absorbs the BG business, Shell aims to deliver double-digit returns to its shareholders, to position itself for an upturn in LNG demand beyond 2020 and to regain its position as the leading player in its field.

Shell also confirmed today that it has taken a final investment decision on a major petrochemicals complex near Pittsburgh, Pennsylvania. It will start construction, in 18 months’ time, on an ethylene cracker with a polyethylene derivatives units, tapping shale gas in the Marcellus and Utica basins to produce up to 1.6 million tonnes a year (mta) of polyethylene.

[waldron] 07/6/2016 09:07

Shell Boosts Savings Target on BG Group Acquisition
07/06/2016 6:56am
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Tuesday 7 June 2016
Click Here for more Shell A Charts.

By Rory Gallivan



LONDON--Royal Dutch Shell PLC (RDSA.LN) on Tuesday increased its target for the benefits it expects to make from its tie-up with BG Group.

Shell, which earlier this year completed its roughly $50 billion acquisition of BG Group, said it now expects $4.5 billion in deal-related synergies on a pre-tax basis in 2018, up from a previous target of $3.5 billion.

Shell said it still expects to make $30 billion from asset sales from 2016 to 2018.



-Write to Rory Gallivan at [e-mail]; Twitter: @RoryGallivan



(END) Dow Jones Newswires

June 07, 2016 02:41 ET (06:41 GMT)

[waldron] 07/6/2016 08:34

Shell caps spending for rest of the decade as belt tightening continues

Ben Van Beurden
Ben Van Beurden has outlined his vision of Shell for the rest of the decade

Jon Yeomans

7 June 2016 • 8:19am

Oil giant Shell is targeting yet more cost savings as it looks to pay down debt and protect its dividend in an era of lower oil prices.

The Anglo Dutch giant said today capital spending would be in the range of $25-$30bn a year to 2020. For 2016 it will be $29bn, down from a forecast “trending toward” $30bn, which was itself down from an earlier projection of $33bn.

The company said this spending could go even lower if oil prices sink below their current levels, but crucially would not go higher if oil surges higher. Crude has stabilised at around $50 a barrel, after hitting a 12-year low of $28 a barrel in January. It was trading at more than $100 two years ago.

Shell also expects to save more money than previously thought from its multibillion takeover of Reading-based BG Group.

It has pencilled in $4.5bn (£3.1bn) of synergies from its £40bn merger with liquid natural gas (LNG) specialist BG earlier this year, up from $3.5bn.

Asset sales are expected to be $30bn for 2016-18, with up to 10pc of Shell’s oil and gas production earmarked for disposal. The company plans to quit five to 10 countries as part of this retrenchment, with $6bn-8bn in asset sales realised this year alone.

Ben van Beurden, chief executive, said he saw “robust demand” for oil and gas in the coming decades.

“By capping our capital spending in the period to 2020, investing in compelling projects, driving down costs and selling non-core positions, we can reshape Shell into a more focussed and more resilient company, with better returns and growing free cash flow per share,” he said.

Mr van Beurden was speaking ahead of Shell’s capital markets day in London. He outlined chemicals production and deep water drilling as two key growth areas for the oil major. Through its acquisition of BG, Shell has acquired valuable deepwater sites in Brazil and the Gulf of Mexico, which it said “represent the best real estate in global deep water”.

Shell also announced it will build a new chemicals plant in Pennsylvania. This will use natural gas from shale production to produce petrochemicals used in manufacturing.

Analysts will be keeping a close eye on how Shell manages its debt load, which has increased to 26pc of its total capital since the BG merger, up from 14pc at the end of 2015. Last month it announced a further 2,200 job cuts, on top of 7,500 it made last year, and has called for voluntary redundancies at the former BG Group headquarters. BG employed just over 5,000 people before the takeover.

"Overall, we read the statement as positive, and expect Shell to reverse some of its underperformance versus peers in recent days," said Biraj Borkhataria, analyst at RBC Capital Markets, in a note to clients.

[waldron] 07/6/2016 07:24

Royal Dutch Shell Capital markets day 2016: Re-shaping Shell
07/06/2016 6:00am
UK Regulatory (RNS & others)


TIDMRDSA TIDMRDSB

Capital markets day 2016: Re-shaping Shell to create a world class investment
case

* Responding to the changing landscape by re-shaping Shell

* Setting out an agenda for 2020 and beyond: grow free cash flow per share
and returns

* Taking action to manage the down-cycle: delivering on lower costs, lower
and more predictable spending, asset sales and profitable new projects

* BG synergies target updated: expectation to deliver $4.5 billion in 2018

* Go ahead given for new Pennsylvania chemicals development. Chemicals and
deep water are now Shell's growth priorities

* New energies established to develop commercial opportunities in the energy
transition

* Potential for $20-25 billion organic free cash flow and 10% ROACE around
end of decade, in a $60 oil price environment

London, June 7, 2016 - Shell Chief Executive Officer, Ben van Beurden, today
provided an update on the company's strategy, that sets a clear course for
stronger returns and free cash flow.

Setting his remarks in the context of a volatile industry backdrop, van Beurden
said: "I see important opportunities for Shell from the substantial and lasting
changes underway in the energy sector.

We expect to see robust demand for oil and gas for decades to come, in a global
energy system in a long-term transition to lower carbon fuels. As well as low
oil prices today, we are seeing higher levels of price volatility, due to
geopolitical change, the speed of information flows, and the pace of innovation
in our sector.

By capping our capital spending in the period to 2020, investing in compelling
projects, driving down costs and selling non-core positions, we can reshape
Shell into a more focussed and more resilient company, with better returns and
growing free cash flow per share.

All of this is underpinned by an unrelenting focus on safe and
environmentally-responsible operational performance, high quality and
commercial project execution and prudent financial management of the company."

Turning to the recent acquisition of BG, van Beurden said: "The BG deal is an
opportunity to accelerate the re-shaping of Shell. Integration is gathering
pace, and today we expect to deliver more synergies, and at a faster rate."

We are announcing an increase in expected deal-related synergies, from the $3.5
billion set out in the prospectus, to $4.5 billion on a pre-tax basis in 2018,
an increase of some 30%. We expect to achieve and exceed the $3.5 billion
synergies prospectus commitment earlier than expected, in 2017, when synergies
should be $4 billion. Our other deal-related financial commitments to
shareholders in the form of asset sales, debt reduction, and dividends,
followed by share buy-backs, are unchanged.

Van Beurden added: "With our continued strong focus on returns and growth in
free cash flow per share I want to create a world-class investment case for
Shell shareholders."

Van Beurden went on to set out Shell's portfolio priorities, which have been
revised to drive an improvement in returns and free cash flow. Van Beurden
defined three categories that play out across different time scales:

Cash engines: conventional oil and gas, integrated gas, oil sands mining, and
oil products

* Cash engines are stable businesses, which underpin the financial delivery
of the company today. They should have strong and resilient returns and
free cash flow, to fund dividends and the balance sheet well into the next
decade and beyond.

* We continue to invest in selective growth opportunities in these
businesses, at a level that enables positive free cash flow throughout the
macro cycle. Through-cycle returns here should be attractive and
competitive.

* Integrated gas, which was previously a growth priority for Shell, has
reached critical mass following the BG acquisition and planned growth in
liquefied natural gas (LNG), particularly in Australia. The pace of new
investment will slow here, and integrated gas will now prioritise the
generation of free cash flow and returns.

Growth priorities: deep water and chemicals

* Shell has advantaged positions and affordable growth plans here, which
should create a pathway to improved returns and material free cash flow
from around 2020, as these businesses become new cash engines.

* We give priority to growth projects in these businesses, such that free
cash flow may be negative at the lower end of the cycle. Returns should
improve over the next 3-5 years.

* Brazil and the Gulf of Mexico represent the best real estate in global deep
water. We are developing competitive projects here based on this advantaged
acreage. Shell's deep-water production could double, to some 900 thousand
barrels of oil equivalent per day (kboed) in 2020, compared with 450 kboed
in 2015.

* In Chemicals, the company already has brownfield growth projects underway
on the US Gulf Coast and in China. Today we are announcing the final
investment decision on a new, 1.5 million tonnes per annum (mtpa) cracker
and polyethylene plant in Pennsylvania, USA, which will use natural gas
from shales production as its feedstock. Once these projects are on stream,
early in the next decade, Shell's ethylene capacity should reach around 8
mtpa, compared with 6.2 mtpa today.

Future opportunities: shales and new energies

* These businesses are expected to become significant growth priorities for
Shell beyond 2020 as we establish clear pathways to profitability. They are
themes with material value and upside potential to deliver returns for
Shell shareholders.

* Investment here remains relatively low, focused on current positions and
identifying potential opportunities. Free cash flow will likely be
negative, and returns low, for some time. Capital employed here is
constrained until attractive opportunities are developed.

* In shales, Shell's restructured portfolio is focused on North America and
Argentina, with substantial long-term growth potential.

* In new energies, there is potential for Shell to achieve material scale and
profitability. As the energy transition unfolds, we intend to establish a
portfolio to build on our established strengths in low-carbon biofuels,
hydrogen and smart customer solutions; as well as in solar and wind. Many
of these activities complement the company's natural gas strategy today.

Overall, Shell's focus is on re-shaping the company. We will retain the most
competitive and resilient positions, through targeted investment, and
substantial asset sales. This is a value-driven, not time-driven, divestment
programme; and an integral element of Shell's portfolio improvement plan.

Updating our financial outlook

Following the BG acquisition, and as expected, Shell's balance sheet gearing
increased to 26% at the end of Q1 2016 from 14% at the end of 2015.

Shell's priorities for cash flow, as announced with the BG acquisition, are
unchanged: 1) reduce debt, 2) pay dividends, and 3) a balance between capital
investment and share buy-backs.

Our free cash flow is being reduced due to low oil prices, and this could
continue for some time. In response, Shell is pulling four levers to manage the
financial framework in the down-cycle.

* Capital investment will be in the range of $25-$30 billion each year to
2020, as we improve capital efficiency and ensure a more predictable
development funnel for new projects. Investment for 2016 is expected to be
$29 billion, excluding the purchase price of BG, some 35% lower than the
pro-forma Shell-plus-BG level in 2014. In the prevailing low oil price
environment we will continue to drive capital spending down towards the
bottom end of this range; or even lower if needed. In a higher oil price
future we intend to cap our spending at the top end of the range.

* New project start-ups since end-2014 should contribute some $10 billion of
annual cash flow by 2018*. Investment delivers new, profitable projects for
shareholders.

* Programmes to sustainably reduce operating costs are in place across the
company; we expect to reach a run-rate of $40 billion of underlying
operating costs at the end of 2016, some 20% lower than the 2014 pro-forma
level for Shell-plus-BG with potential for further cost reduction.

* Asset sales, as planned, are expected to be $30 billion for 2016-18. We
have earmarked up to 10% of Shell's oil and gas production, including 5 to
10 country exits, for disposal. We expect to make significant progress on
the first $6-8 billion of this programme in 2016.

As a result of Shell's portfolio development and investment, we expect to see
an improvement in returns in the next few years, our debt reduced, and
significant growth in free cash flow, across a range of oil prices. For
example, organic free cash flow could reach $20-$25 billion and return on
capital employed some 10% around the end of the decade, assuming $60 oil
prices. This compares to 2013-15 averages of $12 billion and 8% with average
$90 oil prices.

Van Beurden concluded: "Our strategy should lead to a simpler company, with
fundamentally advantaged positions, and fundamentally lower capital intensity.
Today, we are setting out a transformation of Shell."

Ends

[waldron] 06/6/2016 19:22

Shell 'to warn about independent Scotland's finances as it sounds EU alarm'
Offshore Oil Platform in the North Sea

Offshore Oil Platform in the North Sea

14 mins ago / Kate Devlin, UK Political Correspondent / @_katedevlin
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The UK's largest oil firm is expected to warn that leaving the EU could trigger another independence referendum.

Shell executives will also caution that an independent Scotland could struggle to afford the billions of pounds needed to support decommissioning in the crisis-hit North Sea when they meet investors later this week.

The warning comes just a day after a survey suggested that nearly one in three of the UK’s oil and gas firms is planning further job cuts this year, following a global slump in prices.

Hundreds of posts in Aberdeen have already been axed.

Last month it emerged that the industry was running at a loss to the taxpayer for the first time since records began.

The pumped £24million more into investment and decommissioning than it got back in tax revenues last year.

Just five years ago the sector contributed £11bn to the Exchequer.

In 2014 Ben van Beurden, Shell's chief executive, said that the oil giant would prefer the UK to remain a "single country".

But he also said that the company would "deal" with independence, if it happened.

That same year he argued that the EU's economic challenges were "best tackled - to the benefit of all - with the UK's voice loudly expressed and loudly heard inside the EU.

"It's for similar reasons that we'd like to see Scotland remain part of the United Kingdom."

Earlier this year Mr van Beurden was among executives who signed a letter, organised by Downing Street, backing 'Remain'.

A spokesman for Shell said: "Our position has not changed."

[grupo guitarlumber] 05/6/2016 08:33

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Review

1 June 2016
The Oracle of Oil: The man who predicted peak oil

M. King Hubbert was a smart geologist with canny ideas about oil that no one listened to at the time. Can a fascinatingly flawed book rescue his legacy?
oil
The oil crisis of 1973 showed that Hubbert’s key ideas were right

H. Armstrong Roberts/ClassicStock/Getty

By David Strahan

THIS is a curious time to publish a biography of M. King Hubbert. The story of how this brilliant but irascible Shell geologist accurately forecast in 1956 that US oil production would peak and go into terminal decline by 1970 is by now well worn.
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Worse, after the supply crunch of 2008 that sent the price soaring to $147 per barrel and was widely mistaken for the global peak, the world is now swimming in oil once more, and the price languishes at around $50.

In The Oracle of Oil, Mason Inman seeks to rehabilitate Hubbert, yet he struggles to make a convincing case. The book is nonetheless well written, deeply researched and rich in anecdote – Hubbert’s character and his intellectual achievements sing out.

Born to poor Methodists in hardscrabble Texas hill country, Hubbert sold his cow to go to college, was driven to science by his atheism, and later made donations to Martin Luther King. He achieved many breakthroughs with little more than a fierce intellect and a blackboard.

In 1953, he was the first to figure out how fracking worked, showing that the fractures caused by injecting fluid into rock would spread vertically not horizontally as industry experts then believed. Initially, they ignored him, convinced only after experiments involving a goldfish bowl, a soda bottle and a turkey baster.
Forecast battle

You couldn’t accuse this account of being pacy, though. It’s a good 100 pages before we come to Hubbert’s defining achievement: a revolutionary way of forecasting that introduced us to the idea that the rate of oil production would peak and start to fall long before reserves were exhausted, often as early as halfway through. On a graph this produced a roughly symmetrical bell curve with a central peak – hence the name.

Hubbert’s forecast pitched him into a running battle with many in the oil industry until he was eventually proved excruciatingly right during the oil crisis of 1973, and achieved “oracle” status while Jimmy Carter was president.

Inman plots Hubbert’s work and short-lived impact on US energy policy, until the geologist’s death in 1989, but his uncritical approach relegates any attempt to find current relevance for Hubbert to a 20-page epilogue. Even here, the author seems too much in love with his subject to confront the toughest conclusion raised by his own material – that Hubbert’s work may no longer matter.

At the start of this century, talk of peak oil flooded the energy debate. Surging demand in China, the invasion of Iraq and the upward march of the oil price suggested an impending crunch. This seemed to have arrived between 2005 and 2009, when global production stayed flat at between 82 and 83 million barrels per day (mb/d), sending the price spiralling to $147 per barrel – up 15-fold on the previous decade.

Many thought we had reached the limits of oil production and the global peak was nigh. But production started to grow again, and by 2014 had reached almost 89 mb/d, causing the price to slump from what appeared to be the new normal of around $115 to less than $30 by the start of 2016.

The irony is that peak oil of a sort did arrive in 2006, and Hubbert hit the bullseye, though Inman makes surprisingly little of this. In 1956, Hubbert forecast that global production of crude oil – oil found in pressurised reservoirs that flows freely up when wells are first installed – would peak “within about half a century”.

“In his lifetime, the oracle’s forecasts were always ignored or dismissed until it was too late“

Exactly 50 years later, crude oil production peaked at 70 mb/d, and because it then made up the bulk of oil supply, this caused the temporary plateau of global oil production that helped pitch the global economy into recession. Now the former naysayers, from the International Energy Agency to most major oil companies, admit that conventional crude production has indeed peaked. Hubbert’s forecast, made a lifetime before, again proved to be spectacularly accurate.

But then again, so what? Total oil production, including “unconventional” sources such as tar sands and shale oil, soon started to grow again. Of the 6 mb/d increase in global oil production between 2006 and 2014, almost a fifth came from the Canadian tar sands, and the rest from the US “shale oil revolution” driven by fracking. Inman misses another huge irony here: Hubbert’s forecast for the peak of global crude oil was bang on, but its full impact was deferred by the very production technique he had helped develop 60 years earlier.

Many economists would argue that this exposes the blind spot of Hubbert’s approach – it didn’t take into account the potential of technology to expand the oil resource we can extract. That has been demonstrated, but if tar sands and shale oil are what’s left, it may not give us much of a breather.

There is no knowing the future trajectory of tar sands output now that its production capital, Fort McMurray in Canada, has been devastated by wildfire after unusually dry weather some blamed on global warming. As Inman points out, in the US shale patch, fracking wells suffer vertiginous decline rates of up to 50 per cent in the first year; the sweet spots have been tapped already; and the industry is massively in debt and failed to cover its costs even at $100 per barrel. He might have added that even the International Energy Agency expects US shale production to peak in 2020.

But this is almost beside the point. Hubbert’s legacy will not be determined by a forensic scrutiny of his life or of the short-term outlook for US shale, but by what happens after shale peaks. If non-conventional production continues to meet growing global demand, Hubbert will fade into footnote. So too if demand for oil starts to fall sooner than supply, through improvements in efficiency and the electrification of vehicles. The chances of this have improved with the Paris climate agreement, as even Saudi Arabia seems to accept, having announced a $2 trillion fund to wean its economy off oil by 2030.

If, however, nothing turns up to replace shale, technologies fail to curb oil demand, and supply constraints finally bite, Hubbert may yet be proved broadly right. But his influence will probably still be negligible: as Inman makes depressingly clear, the oracle’s forecasts were always ignored or dismissed until it was too late.

The Oracle of Oil: A maverick geologist’s quest for a sustainable future

Mason Inman

W. W. Norton

This article appeared in print under the headline “The peak oilman”

[rburtn] 01/6/2016 08:23

Here is a riddle derived from a proposal that we are expected to accept:- If x gms of CO2 in earth's atmosphere increase its temperature by t, describe the process that limits the rise to t without also proving that it would also limit t to 0.

Climate Change is real but it happens to be because we are coating the earth's landmass with concrete and slate - we are doing a Goldfinger on earth's sweat pores. The distortion of vapour production is re-distributing energy northwards (most urban spreads are in the northern hemisphere) and simple maths says earth's average T will rise. The GHG effect is a myth and defies the Laws of Thermodynamics.

[waldron] 30/5/2016 09:19

Imagine, if you can, a company which suffers a $200bn plunge in revenues and sees its operating profits collapse by 93pc.

Imagine that company surviving such a life-threatening trauma but being resilient enough to get stuck into the acquisition of a serious competitor.

Well, that's been the precise up-to-date experience of Royal Dutch Shell (Shell). And the rival it picked up amidst all its woes is BG plc. But then oil companies are a law unto themselves and some can afford to ship revenue and profitability damage, which would be fatal for most other corporations.

Royal Dutch Shell has come through a fair number of trade wars over the years.

It earned a share of notoriety as one of the famous 'Seven Sisters', a shadowy oil cartel that pretty much controlled the Middle Eastern oil production after World War II and whose dominance was broken up by the OPEC 'oil shock' in the 1970s.

Today, Shell is involved in all aspects of technical development and commercial activity. Through its subsidiaries it explores for oil, refines it, produces petroleum and operates filling stations worldwide.

Investors take some solace in the experience that unlike its competitors, Shell resisted the sell-off of its refining assets. This part of the business now accounts for most of its profits.

The Anglo-Dutch company, valued at £100bn, operates in over 70 countries, has an interest in 23 oil refineries worldwide and employs 90,000 people but is planning a headcount reduction of 12,500.

The company is famous in all parts of Ireland, trading continuously for over a century until it sold its business to Topaz.

However, it is perhaps best known in the West, as the operator of the endlessly controversial Corrib Gas project; but as its long history around the world has shown, controversy is no stranger.

Last February, Shell announced it had acquired the UK- quoted gas and oil operator BG for £47bn. Some analysts think it's a game changer, acquiring good assets in a down cycle. BG's Liquefied Natural Gas (LNG) assets in both Australia and Brazil support Shell's rationale for the merger. As a result, Shell is now the largest producer globally of LNG. The acquisition also increases its oil reserves by 25pc.

An added attraction of BG is that it less reliant on oil revenues and its performance in the face of plunging oil prices has held up. However, some have criticized the takeover, accusing Shell of over paying.

Investors are happy that Shell's capital discipline and cost savings have helped it retain its dividend payments but some analysts worry should the oil price slump continue into 2017 dividends costing $15bn per annum could be under pressure.

In truth, Shell has an unsurpassed payout history. It hasn't missed a dividend since 1942. That's my sort of company. Consequently, the well-supported stock trades at £18, which is some way off its 10-year high of £22 in mid-2014. The decimation of the oil industry is shown in Shell's pre-tax profits (it reports in dollars) which plunged to $2bn last year - some considerable distance from $33bn five years earlier. The profits came mainly from its downstream business, helped by favourable exchange rates and lower costs.

Last year, it reduced its operating cost and capital expenditure but analysts are of the opinion more cuts will follow and should consider exiting 10 to 15 countries, concentrating on its core competency. Debt levels remain manageable but Shell recently had its debt rating lowered - its first since Standard and Poor's started in 1990 - and it is not alone. The world's biggest oil company, Exxon, was also downgraded.

The question for investors is whether oil prices have reached the bottom of the brutal slump. Shell's projections for this year is $67 a barrel, $75 next year and $95 in 2018.

So does the adventurous investor believe that Shell is best poised to lead the recovery? I believe it is.

Nothing in this section should be taken as a recommendation, either explicit or implicit to buy any of the shares mentioned.

Irish Independent