|Oil Minister: Iran to Back OPEC Deal Extension
Oil Minister: Iran to Back OPEC Deal Extension
TEHRAN (FNA)- Oil Minister Bijan Zangeneh voiced Iran's support for a recent decision by the Organization for Petroleum Exporting Countries to extend OPEC's oil freeze deal.
"If majority of OPEC and non-OPEC states agree to extend the oil freeze deal, Iran will go with other members similar to the past," Zangeneh told reporters after his meeting with European Commissioner for Energy Miguel Arias Cañete.
The Iranian oil minister underlined that positive signals have been received for extending the six-month oil freeze deal in the second half of 2017 and Iran will accompany other member-states of OPEC if they support the extension.
In relevant remarks in mid-April, Zangeneh voiced Tehran's support for continuing crude output cuts by OPEC.
"Most of the oil producers support an extension of the agreement which reached among OPEC member-states last year," Zangeneh said.
He reiterated that extending a crucial oil output agreement by world’s biggest producers helped stabilize prices in markets since its implementation.
In December 2016, the OPEC reached a landmark agreement with Russia and other non-members to proceed with the plan and slash oil production by nearly 1.8 million barrels a day for six months starting January 2017.
The agreement exempted key member Iran from the plan, allowing it to increase its production by 90,000 bpd to reach pre-sanction levels of around 4 million bpd.
Nigeria and Libya were also exempted from the planned output cut due to internal conflicts which have already decreased their crude production.|
|04 May 2017
First quarter 2017 results|
|Big Oil Heads for Back-to-Back Profit Triumphs as Fortunes Turn
28 April 2017 13:20 Updated on 28 April 2017 20:26
U.S. supermajors exceed analysts’ estimates with cost cuts
Chevron turns corner after worst annual performance since 1980
Fresh off Big Oil’s best quarter in years, Exxon Mobil Corp. and Chevron Corp. may be poised for a repeat.
One-third of the way into the second quarter, crude prices -- the prime driver of explorers’ profits -- are 25 percent higher than a year ago. If global supplies continue to contract and demand inches up through the end of June, the two dominant U.S. drillers will book a second straight quarterly victory in late July or early August.
Already, analysts are forecasting profit blowouts even larger than those registered when Exxon and Chevron disclosed first-quarter results on Friday. Exxon is seen lifting per-share earnings by 132 percent while Chevron is expected to post its biggest second-quarter profit in three years.
“It’s cutting costs, it’s getting more for every dollar you spend, it’s getting more from each well and getting it out faster,” said Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis. “It just shows how these companies have had to adapt to a new environment.”
Exxon, the world’s biggest oil producer by market value, earned 95 cents a share during the first quarter, outperforming all but one of the 19 analysts’ estimates in a Bloomberg survey. Chevron, the second-largest U.S. driller, swung to a profit in a big way, scoring its largest quarterly gain since 2014 and a per-share result that was 64 percent higher than the average estimate.
Brent crude, the benchmark for most of the world’s oil, has averaged $53.82 a barrel since the current quarter began on April 1, compared with $43.10 a year earlier, according to data compiled by Bloomberg.
As charter members of the elite supermajor clique that also includes Royal Dutch Shell Plc, BP Plc and Total SA, Exxon and Chevron are among the biggest beneficiaries of the escalation in crude prices. Total reported a 56 percent profit increase on April 26 and if the trend holds, Shell and BP would post impressive results next week.
Exxon’s profit surged even as oil and natural gas production fell 4 percent from the same period last year, according to a statement from the Irving, Texas-based company Friday. Exxon cut capital and exploration expenditures in the quarter 19 percent to $4.2 billion.
“In both cases, the earnings beat was largely from realized pricing rather than production,” said Pavel Molchanov, an analyst at Raymond James Financial Inc. in Houston. “Pricing is always a proverbial black box for multinational oil and gas producers, and it is not something that companies can themselves control.”
While benchmark Brent crude rose more than 50 percent last year to more than $50 a barrel, prices are down about 9 percent in 2017 as a resurgence in U.S. shale production threatens an attempt by the Organization of Petroleum Exporting Countries and its allies to eliminate a global oversupply.
In his debut quarter, Exxon Chief Executive Officer Darren Woods is focusing on prospects in places as diverse as offshore Guyana and the New Mexico desert to replenish reserves that last year underwent the deepest cut in Exxon’s modern history. Woods’ predecessor Rex Tillerson retired in January to become U.S. secretary of state. Two weeks later, the company announced the $5.6 billion purchase of acreage in New Mexico.
The company’s board expects to make a final investment decision on the 1.4-billion barrel Liza discovery off Guyana’s coast around the middle of this year, said Vice President Jeff Woodbury.
Profit from Exxon’s overseas production climbed $1.51 billion, offsetting a loss from U.S. wells. U.S. crude output climbed 2.6 percent during the quarter as oil production dropped in every other region of the world. Exxon’s cash balance was up 32 percent during the quarter to $4.9 billion.
First-quarter net income rose to $4.01 billion, or 95 cents a share, from $1.81 billion, or 43 cents, a year earlier, according to the statement. Exxon had been expected to post per-share profit of 86 cents, based on the average of 20 analysts’ estimates compiled by Bloomberg.
Chevron Slims Down
Chevron curbed operating expenses by 14 percent and drove drilling outlays down 30 percent during the January-to-March period, the San Ramon, California-based company said in a statement on Friday. The company reiterated plans to lift full-year output by 4 percent to 9 percent, excluding the impact of asset sales.
For Chevron, 2016 was a painful year. The company posted its first annual loss in at least 36 years and failed to replace all the crude and natural gas it pumped with new discoveries. As a result, Chief Executive Officer John Watson vowed to cut spending by 15 percent this year to cope with the lingering cash flow impacts of the worst oil market crash in a generation.
Watson has also said he’s devoting 75 percent of the 2017 drilling budget to U.S. shale fields and other projects that will generate cash within two years. That’s a titanic shift for an operator renowned for its proficiency in constructing massive, intricate crude and gas projects that produce for decades.
On Friday, the company swung to a profit of $2.68 billion, or $1.41 a share, in the first quarter, compared with a loss of $725 million, or 39 cents, a year earlier, according to the statement. The company had been expected to disclose per-share profit of 86 cents, based on the average of 22 analysts’ estimates compiled by Bloomberg.
The profit result included a $600 million boon from an asset sale, which accounted for about 32 cents of the per-share gain, according to Bloomberg calculations.
“The sweet-spot of financial firepower -– and therefore higher returns to shareholders –- still requires significant price recovery,” Alastair Syme, an analyst at Citigroup Inc., said in an April 19 note.|
|Goldman's Currie Sees High Chance OPEC Will Extend Output Curbs
With a deal, WTI oil seen trading in $55-$60 a barrel range
Currie sees backwardation developing in crude market
There’s a high probability that OPEC will agree to extend crude production curbs aimed at draining excess global supply, according to Jeff Currie, head of commodities research at Goldman Sachs Group Inc.
On a scale of 1 to 10 the chance of a deal is a 6 or 7, Currie said in an interview on Bloomberg TV. The Organization of Petroleum Exporting Countries is meeting on May 25 to discuss the curbs.
West Texas Intermediate crude would trade in a $55- to $60-a-barrel range if the accord is extended, which is an "substantial upside, given we are trading at roughly $49.50" a barrel, Currie said. There would be a $3-to-$5 downside risk if there’s no deal to prolong the cuts.
Goldman’s "focus is on the term structure" more than on oil’s price. They’re looking for a backwardated market, where short-term prices are at a premium to those for later delivery.|
|Saudis, Russia To Discuss Oil Cuts Extension Within Two Weeks
By Tsvetana Paraskova - Apr 26, 2017, 1:32 PM CDT Crude Oil
As OPEC and non-OPEC producers seem to move closer to a consensus over extending the output cut deal beyond June, Saudi Oil Minister Khalid al-Falih will talk a possible extension with Russian Energy Minister Alexander Novak within the next two weeks and may discuss some of the issues on the phone as early as this week, Falih said on Wednesday.
“There seems to be a consensus in that direction, but we’re not 100 percent there,” al-Falih told reporters while on a visit to Azerbaijan, as quoted by Bloomberg.
“We still need to talk to all countries. A very important country to talk to, of course, is Russia, the biggest non-OPEC exporter,” al-Falih noted.
Novak and al-Falih would aim to reach some decision “that everybody has to support”, according to al-Falih.
Initial enthusiasm over OPEC’s boasting record compliance rate and assurance that the oil market would soon rebalance thanks to the output cuts has faded, as it has become evident that global oversupply is still large.
Although Russia has signaled it may be weighing a possible cut extension, it has not officially committed to joining a rollover of the cuts by the end of the year.
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Some Russian government officials have reportedly said that the country’s oil production could rise to the highest in 30 years in 2017 if the extension agreement falls through.
For now, Russia has given its broad support for an extension, although the only specific that has come from Novak so far was a comment made in March stating that it is too early to discuss the issue. The decision whether to extend the period of the cuts will depend on what the inventory situation in April will be, and what the forecasts for May and June will be, Novak has said.
Related: Saudi Arabia Thwarts Attempted Attack On Aramco Facility
However, a possible extension of the cuts would coincide with the Russian summer when production is typically rising, and Moscow agreeing to cut output at that time is not as easy.
The final decision whether to roll over the cuts is expected to be made at an OPEC meeting in Vienna on May 25.
By Tsvetana Paraskova for Oilprice.com|
|A little dabble in an oil stock for the portfolio with a regular income in the form of 4 x quarterly dividends and a potential for recovery.
My thinking is that the recent dip in the oil price should give a margin of safety.|
|Oil supermajors dig out of doldrums as cash poised to surge
By Rakteem Katakey on 4/26/2017
(Bloomberg) -- Oil majors' struggle against crude’s collapse is starting to ease, giving some companies enough cash to pay shareholders without piling on more debt.
The world’s five biggest non-state oil producers, known as the supermajors, probably increased cash from operations by a combined 67% last quarter from a year earlier, according to HSBC Bank Plc analysts Gordon Gray and Kim Fustier. That may allow some to cover dividends and capital spending without borrowing for the first time since 2012, they said.
In the past three years, Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., Total SA and BP Plc have canceled billions of dollars of projects, dumped thousands of jobs and amassed towering debts to weather crude’s decline. While prices are still half their 2014 level, a partial recovery, coupled with spending cuts, contributed to “sweet-spot221; conditions in the first quarter that probably drove up earnings, according to Morgan Stanley.
The “macro environment was favorable for the majors during the first quarter,” said Martijn Rats, an analyst at Morgan Stanley in London, citing higher prices and resilient refining margins. “In addition, cost reductions are still coming through,” helping bring a “significant improvement in net income,” he said.
The five companies combined are expected to more than double first-quarter net income, according to analyst estimates compiled by Bloomberg. Chevron will return to profit while Shell’s earnings will rise to a seven-quarter high, the estimates show. Exxon, Total and BP may post their biggest profits since September 2015.
“The oil price is a big thing, but the other thing is they’ve also been helping themselves by taking operating costs out of the business,” said Jason Gammel, a London-based analyst at Jefferies International Ltd. “We are at oil-price levels where most of these companies are pretty close to covering their dividend.”
The big five oil producers also operate refineries and petrochemical plants, giving them a safety net during crude’s downturn when earnings from oil and gas production sank. Refining margins rose during the worst of the slump as the cost of the raw material -- crude oil -- fell while demand for fuels stayed strong. Margins have since narrowed but remain buoyant.
Yet doubts remain. Oil’s recovery has stalled this year as a revival in U.S. shale production threatens an attempt by the Organization of Petroleum Exporting Countries and its allies to eliminate a global oversupply. Although benchmark Brent crude rose more than 50% last year, prices are down about 9% in 2017.
Amid concern that OPEC and its partners will fail to reduce stockpiles significantly, energy companies have performed worst in the MSCI World Index this year, tumbling from pole position in 2016. After rising 44% last year, BP’s shares are down 12% in 2017, while Shell’s B shares are about 11% lower in London. Exxon has dropped 9.5%, Chevron 9.3% and Total 2.2%.
The majors won’t come roaring back until oil prices rally further, according to Alastair Syme, an analyst at Citigroup Inc.
“The sweet-spot of financial firepower -– and therefore higher returns to shareholders –- still requires significant price recovery,” Syme said in an April 19 note, downgrading both Shell and BP. While the companies have offered shareholders stock in place of cash, and implemented hefty cost cuts, they still haven’t adequately tackled the high cost of dividends, he said.
Dividend yields at Shell and BP, which fell through 2016 as crude started to recover, have risen this year, typically a signal that investors fear a cut in payouts.
BP declined to comment when contacted by email. Shell referred Bloomberg to Chief Executive Officer Ben van Beurden’s comments earlier this year, when he said free cash flow “more than covered our cash dividend” in the fourth quarter.
France’s Total will kick off the supermajors’ first-quarter earnings season on April 27, with Exxon and Chevron following the next day. BP will report on May 2 and Shell on May 4.
“You’d hope by now the cost and spending cuts start showing up in the accounts,” said Iain Armstrong, an analyst at Brewin Dolphin Ltd., which owns BP and Shell shares. “Benefits of oil prices will be a major factor and how much of that the companies have been able to capture with lower costs.”|
|@ Karateboy, div yield is only 9% if use $ dividend and £ price. Actually yield ~7%. Is div sustainable? It certainly is. Is the yield sustainable - doubt it i.e. due to share price moving towards a 5.5% dividend over time due to FCF improvement i.e. share price ~ £27 target ... all imho|
|THE WEAKNESS OF THE US DOLLAR AND OR STRENGTH OF STERLING MIGHT IMPACT DIVI PAYMENTS
AT SOME STAGE|
|Dividen almost 9%. Is this real? and can stay that high?|
|Europe Energy Firms to Finance Up To €4.75 Billion for Gazprom Nord Stream 2 Gas Pipeline
Dow Jones News
Intraday Stock Chart
Today : Monday 24 April 2017
Click Here for more Engie Charts.
By Emre Peker
BRUSSELS--European energy firms pledged Monday to pay for half the cost of a natural-gas link from Russia to Germany, lending significant support to a controversial pipeline that is fueling tensions within the European Union.
A consortium of five companies--Engie, OMV, Royal Dutch Shell PLC, Uniper and Wintershall Holding GmBH--said they would provide up to €4.75 billion ($5.1 billion) in long-term financing to Nord Stream 2 AG, a wholly owned subsidiary of Russia's state-owned Gazprom. Each European firm would fund up to €950 million.
The pipeline, which would double the capacity of the existing Nord Stream link by adding another 55 billion cubic meters of annual volume, faces stiff resistance from Central and Eastern European members of the EU.
Previously, Polish competition authorities blocked the five European companies from becoming Nord Stream 2 shareholders.
"The financial commitment by the European companies underscores the Nord Stream 2 project's strategic importance for the European gas market," Gazprom and its European backers in Nord Stream 2 said in a joint statement. The pipeline, which is scheduled to be completed by the end of 2019, will contribute to competitiveness and long-term energy security in the EU, they said.
Gazprom's planned expansion would enable Russia to cut back on eastern routes through Ukraine and Belarus, critics say. That would threaten the EU's energy security, while also undermining a key diplomatic objective for Brussels: supporting Kiev amid its conflict with Moscow.
Write to Emre Peker at firstname.lastname@example.org
(END) Dow Jones Newswires
April 24, 2017 10:21 ET (14:21 GMT)|
|There was a hell of a lot of anti shale propaganda. Certainly as far as production costs go totally musjudged. It turned out you could produce it for diddly squat...the equivalent of $10 a barrel for oil.
It makes decisions on investing in fuel companies all the more difficult. But the previous poster is right there is more to Shell than just extracting oil.|
|When you look at how many countries in the world depend on oil and gas to pay their way,can the prices go much lower and stay there.
The west sells these same counties goods which if they don't have the money to buy,we in the west will suffer and world trade will stagnate.Its as if the yanks are now using oil production as a weapon,especially against the Russians and the middle east.
You reduce production we increase it, seems to be their intent,as shale production becomes cheaper the yanks will have a bigger leverage.
I still like shell for its gas production as I feel that is the future at the moment,with coal and oil,being the bad boys and gas a greener product.
I am a long term investor for the divi,s and feel even with a cut which I don't think will happen its still a good company and returns will follow inflation which is just around the corner.|
|Oh for a crystal ball!Ariane.
You pays your money and takes your risk as they say.Can the world suddenly give up oil and gas??|
|2045 seems a reasonable price one hopes
fits neatly into a 1975 to 2075 range
|I have topped up ...|
|Shell dividend to come back into focus in 2017, Cannacord says
Thu, 20 April 2017
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Shell dividend to come back into focus in 2017, Cannacord says
BP Quote more
Chg %: -0.26%
FTSE 100 Quote
Price: 7,118.54 Chg: 4.18 Chg %: 0.06% Date: 16:49
(ShareCast News) - Cannacord Genuity sounded a cautious note on shares of Royal Dutch Shell's B shares pointing out the company's lack of free cash flow and mounting debt pile given its current dividend payouts, telling clients it preferred BP instead.
Analyst Alex Brooks expected the oil major to post a bumper set of first quarter financials.
However, Shell's earnings were seen falling short of its declared dividend for a seventh straight quarter and at the current oil price of $55 a barrel a sustained lift in profits above its divi payout was not on the cards in the foreseable future, he said.
Indeed, in the same research note the broker also said it was lowering its oil price forecast for 2017 from $60 a barrel to $55.
So, "despite protestations from management to the contrary" the payout was likely to come back into focus over the course of 2017.
A combination of hardly any free cash flow over the past decade, high levels of debt and asset disposals at an "unattractive" point in the cycle mean its shares are at the greatest risk of further downward pressure, Brooks said.
The analysts cut his target on the stock from 2,050p to 1,900p and reiterated a 'Sell' recommendation.
BP on the other hand was furthest along in its restructuring process and with the residual Macondo liability set to be gradually settled free cash flow was likely to improve "substantially".
Hence, Brooks said he favoured shares in BP over those in Shell or Total, leading him to reiterate a 'Buy' recommendation and 525p target on the shares of the former.
As of 15:48 GMT shares of Shell BP were down 0.22% at 2,000p.|