Shell Share Discussion Threads

[waldron] 06/6/2019 07:00

Big Oil can still generate big cash at Royal Dutch Shell PLC.

That is Chief Executive Ben van Beurden's sales pitch as he meets with investors and analysts in London and New York this week. The Anglo-Dutch oil giant says it can be both a cash cow and a company trying to meet the challenge of climate change.

Shell is slowly transforming into a cleaner business centered on selling electricity. But in the years to come, it aims to pay billions of dollars back to investors -- at least $125 billion in dividends and share buybacks between 2021 and 2025 alone -- all of it from traditional parts of the oil business.

All those payouts will come from returns on investments the company has already made, said Mr. van Beurden said in an interview with The Wall Street Journal. Oil and gas production, retail gasoline, lubricants, trading and chemicals will be the company's biggest source of cash.

Mr. van Beurden is trying to lure investors back to Big Oil at a time when, he said, investors are "really waking up" to the problem of climate change. Shell expects it will be decades before it can even halve the carbon emissions from its businesses that help warm the planet. Any decline in the oil business is at least a decade away, Mr. van Beurden said. And it will take just as long before investments in a cleaner electricity business produce a return.

"For decades and decades to come, the industry will have to invest in [oil and gas] in order to basically supply demand, which will be there," Mr. van Beurden said. "And as long as we feel we can have competitive positions, as long as we feel we can do that in an environmentally competitive way, a low-carbon way, etc., sure we will want to participate."

It is a challenging time in the oil business. As the effects from climate change grow, they have brought new scrutiny from regulators around the world and some politicians in the U.S. aiming to cut carbon emissions or even more directly shrink the oil-and-gas industry.

Shell has been at the vanguard of large oil companies, especially European-based majors, that have vowed to change to cut emissions. But that change often involves transforming the business entirely or relying on technologies yet to exist. Many investors have begun to wonder whether the oil industry might simply die, while environmentalists have criticized even the most progressive oil companies for failing to evolve fast enough.

Mr. van Beurden said some of that criticism is misleading. He defended Shell's investment in zero-carbon energy as wide-ranging. The company has purchased a utility, an electric-car charging business and a stake in a solar-power company, he said. Still, those electricity businesses will take several years before they can become an equal part of Shell's portfolio along with oil, gas and chemicals.

"We better prove that first before we start putting billions and billions and billions of dollars in it....It needs to be a gentle takeoff process," he said. "When we prove out that this business model that we have -- which is a business model of a future green utility -- actually works, yes, then we are going to step seriously on the accelerator."

Investors have shown little excitement for the pitch. Shell's shares are up slightly more than 1% this week, trailing broader market gains. They are also down about 20% over five years and largely flat for the past 18 months.

Investors have a dour view of oil more broadly, Mr. van Beurden said in a subsequent interview Wednesday on CNBC. Low oil prices troubled many companies in recent years, and now investors have near-term concerns about global economic growth along with long-term fears about crude demand. That is why Shell keeps escalating the shareholder payouts from its traditional oil business, Mr. van Beurden said.

"The sector at this time is still a little bit in the doghouse," he said in the CNBC interview. "At some point in time fundamentals are going to reassert themselves and people are going to say 'Hey, if I get that type of yield on my investment, I better be part of the growth story that will bring.'"

Write to Timothy Puko at [e-mail]



(END) Dow Jones Newswires

June 05, 2019 17:07 ET (21:07 GMT)

[waldron] 06/6/2019 06:57

European markets set for muted open as traders look ahead to ECB decision
Published 19 min ago
Alexandra Gibbs
@alexgibbsy




Key Points

Looking ahead, investors in Europe are awaiting the latest decision from the European Central Bank (ECB). The institution is predicted to maintain guidance, on the likelihood of more stimulus.
Gross domestic product data for the euro area is scheduled for publication on Thursday morning.

European stocks are expected to start Thursday’s session on a relatively mixed note, as investors gear up for the latest decision from the European Central Bank (ECB).

Ahead of the open, the FTSE 100 pointed to a jump of 10 points at 7,222, while Germany’s DAX is set to slip 12 points at 11,970. France’s CAC 40 indicated a drop of 3 points, at 5,289, according to IG.

[fjgooner] 05/6/2019 21:16

Global oil is seen by many commentators as tightening as Venezuela and Iran sanctions effect will soon be reflected in both global and US inventories. There is a few weeks lag effect to wait for the related impact. I'd expect a big bounce in crude prices in the next 30 days.

Happy days are also set to come with a 50% market cap distribution to Shell investors indicated yesterday (in the Shell Investor Presentation) over the 5 year period 2021-25.

Is this the best bargain on the FTSE right now? I think so.

[montyhedge] 05/6/2019 20:04

Great performance by Shell, oil falls again has US storage jumps the most in 30 years.

[spud] 05/6/2019 18:14

DAILY OIL PRICE:Up down, in out, shake it all about. Too much daily oil price navel gazing for my liking. Next week there'll probably be a massive crude shortage, shortly before a glut...It's all made up by the speculators to suit their Book imo. spud

[ariane] 05/6/2019 18:10

FRANCE24

Cyprus strikes $9 bln gas production deal

Date created : 05/06/2019 - 15:28


Cyprus will earn an estimated $9.3 bln over 18 years from exploiting its Aphrodite gas field under a renegotiated contract with Shell, US-based Noble and Israel?s Delek, the energy minister said Wednesday.

George Lakkotrypis told reporters that a re-working of the production contract ensures Cyprus receives an average yearly income of 520 million dollars over the lifespan of the gas field.


"We believe it is a good deal under the circumstances, it will allow the Republic of Cyprus to earn significant commercial revenues estimated at over $9 billion during 18 years of the well?s lifespan,? Lakkotrypis told reporters.

Lakkotrypis said under the new deal, the consortium was obliged to keep to a tight deadline to tap the gas reserves.

"Based on the development and production plan that we discussed, we expect the first gas to be extracted by 2024-25," he said, whereas the consortium previously had no obligation to stick to a timeline.

It was the "biggest development project" on the island with around 7.9 bln dollars invested in infrastructure.

Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet (127 billion cubic metres) of gas but it has yet to be commercialised.

The discovery of nearby Egypt?s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.

Cyprus aims for natural gas to start flowing to an Egyptian LNG facility via pipeline.

It has pushed ahead with exploring for offshore energy resources despite the collapse in 2017 of talks to end the island's decades-long division.

That has angered Turkey, which has had troops stationed in the country since 1974 when it invaded and occupied its northern third in response to a coup sponsored by the military junta then ruling Greece.

Last month, Turkey sent a drillship inside Cyprus?s exclusive economic zone after announcing it would begin its own energy exploration.

In February, ExxonMobil and Qatar Petroleum discovered a huge natural gas reserve off the coast of Cyprus, holding an estimated five to eight trillion cubic feet.

Italy's ENI and Total of France are also heavily involved in exploring for oil and gas off Cyprus.

? 2019 AFP

[ariane] 05/6/2019 17:57

News: Dow Jones

Oil on Track for Bear Market Due to Global-Growth Fears--2nd Update
Print Share Font-size
06/05/19 12:46 PM EDT

By Amrith Ramkumar

Oil prices were on track to sink into a bear market on Wednesday, falling more than 20% below their April peaks, as the global-growth worries gripping financial markets were compounded by fears of a supply glut.

U.S. crude futures were recently down about 3.5% at $51.60 a barrel Wednesday, falling well below the $53.04 level needed to push oil into another bear market after government data showed a surge in domestic stockpiles. Prices had flirted with bear-market territory earlier in the week before closing above the price threshold. If Wednesday's drop holds, this would be the third bear market for U.S. oil prices since the start of 2017.

Brent crude, the global price gauge, declined 2.3% to $60.52 midday Wednesday, bringing it 19% below its 2019 highs. A close at or below $59.65 would put Brent in a bear market.

Investors track oil prices to gauge both supply and demand in energy markets as well as momentum in the world economy. Because crude is critical to the transportation and shipping industries, expectations for global growth often swing prices.

Oil's swift fall comes just weeks after prices crested above $66 a barrel on April 23, when economic data were generally mixed and many expected a U.S.-China trade deal to spur growth later in the year. Since then, escalating tariffs have also sent stocks around the world sliding along with bond yields, with analysts worrying that further protectionism will make longer-term economic damage inevitable.

"The biggest risk would be the negative feedback loop that risk assets create for consumer sentiment and investor sentiment," said John Kolovos, chief technical strategist at Macro Risk Advisors. "The markets are going to be telling us something sooner rather than later."

The decline came after U.S. inventory data showing stockpiles rose more than expected during the week ended May 31 and data showing the U.S. private-sector added 27,000 jobs in May, well below expectations for 173,000 jobs. The figures were the latest causing angst for analysts bracing for a slowdown in U.S. growth and oil demand.

Although lower energy prices could benefit U.S. consumers at the gasoline pump this summer driving season, analysts caution that the prospect of a far-reaching economic slowdown could offset some of those benefits. Weaker-than-expected oil demand from fuel makers has also contributed to the recent rise in crude inventories, pushing stockpiles to their highest level in almost two years.

Higher stockpiles have led some market watchers to wonder whether the inventory buildup could also signal waning consumer consumption moving forward.

"There's a lot of disappointment in U.S. gasoline demand," said Donald Morton, senior vice president of Herbert J. Sims & Co. Mr. Morton oversees an energy trading desk.

While many measures of U.S. consumer spending have stayed steady, investors say fears about a future slowdown have prompted a reversal in momentum after bullish sentiment helped push oil up more than 40% in the first four months of the year.

Downbeat U.S. retail sales and manufacturing figures so far in the second quarter have also raised worries that a growth slowdown overseas is spreading as tariffs escalate. The IHS Markit U.S. Manufacturing Purchasing Managers' Index fell in May to its lowest level in nearly a decade, and similar gauges around the world have also slipped. But despite recent falls, measures of U.S. and China factory output have remained above 50, the level that separates contraction from expansion.

But PMI figures for several countries including Germany and Japan fell below 50 last month, adding to worries that a growth slowdown could be worsening.

"You've suddenly got all sorts of countries around the world seeing their manufacturing indexes fall into contraction territory. That's going to be bad for demand," said Bill O'Grady, chief market strategist at Confluence Investment Management.

"The U.S. economy isn't that bad. The global economy is a whole different animal, and Europe is extraordinary sluggish," Mr. O'Grady added.

Despite falling supply from Iran, Libya and Venezuela amid geopolitical issues in all three countries, bets on relatively steady output from the U.S. and the Organization of the Petroleum Exporting Countries have also contributed to worries about a building glut of crude. OPEC is expected to decide whether to extend production cuts in place for the first half of the year later this month.

Its meeting in Vienna will come with oil prices now below levels analysts say are needed for OPEC members to sustain their economies. Profits at many large energy companies around the world could also suffer after they generally reported tepid results in the first quarter.

With uncertainty about the world economy building, traders say hedge funds and other speculative investors have been forced to generally pare back positions in riskier assets, adding to the pressure on oil. That unwind has contributed to recent volatility -- and prices dropping below closely watched technical levels has added to the wave of negative momentum.

Speculators have cut net bets on higher U.S. crude-oil prices in five consecutive weeks through May 28, pushing them to their lowest level since the week ended March 12, Commodity Futures Trading Commission data show. Bullish bets outnumber bearish wagers by nearly 5-to-1, down from a late April peak of 14-to-1.

"The anxiety in the bear market is here and it's real," Mr. Morton said.

Write to Amrith Ramkumar at [e-mail]



(END) Dow Jones Newswires

June 05, 2019 12:46 ET (16:46 GMT)

[waldron] 05/6/2019 17:16

Brent Crude Oil NYMEX 60.45 -2.45%
Gasoline NYMEX 1.69 -2.20%
Natural Gas NYMEX 2.39 -1.20%
(WTI) 51.41 USD -3.07%

FTSE 100
7,220.22 +0.08%
Dow Jones
25,456.72 +0.49%
CAC 40
5,292 +0.45%
SBF 120
4,183.4 +0.55%
EuroStoxx 50
3,340.95 +0.12%
DAX Index
11,980.81 +0.08%
Ftse Mib
20,158.57 -0.35%



Eni
13.868 -1.07%


Total
46.875 -0.73%

Engie
12.945 +2.29%

Orange
13.9 +0.65%


Bp
537.6 -1.29%

Vodafone
133.1 -0.43%

Royal Dutch Shell
2,460.5 +0.06%

Royal Dutch Shell
2,481.5 +0.10%

HOLDING UP VERY WELL CONSIDERING

[florenceorbis] 05/6/2019 12:04

Berenberg Hold 2,800.00 Reiterates

UBS Buy 2,900.00 - Unchanged

Credit Suisse Outperform 3,175.00 -Reiterates





current share price 2,501 +0.89%

[waldron] 05/6/2019 08:29

Markets
European stocks off to a muted start as global markets bounce back
Published 2 hours agoUpdated 20 min ago
Elliot Smith
@ElliotSmithCNBC
Alexandra Gibbs
@alexgibbsy




Key Points

On Wednesday, stocks in the Asia-Pacific region climbed, building upon gains seen in the U.S., where the Dow Jones Industrial Average soared more than 500 points and other stocks finished the session on a high.
Looking at economic data, composite and services PMI figures for the euro area are scheduled for publication this morning.

European stocks started Wednesday’s session on a slightly cautious note, after Wall Street delivered its second best day of 2019 trading on Wednesday.

The pan-European Stoxx 600 traded around the flatline after the bell, travel and leisure stocks making a strong start with a 0.5% gain while autos slipped 0.3% in early deals.

[ps0u3165] 05/6/2019 07:26

Royal Dutch Shell is building a business with the potential to return US$125 billion or more in the form of dividends and share buybacks to shareholders between 2021 and the end of 2025, the oil supermajor said on its Management Day 2019 on Tuesday.

Shell is significantly increasing the pledge to return money to investors in its next five-year program through 2025, compared to US$52 bullion in distributions to shareholders between 2011 and 2015, and to expected shareholder distributions of around US$90 billion in the period 2016-2020.

[waldron] 05/6/2019 07:01

Europe set for minor gains at the open as global markets bounce back
Published 22 min agoUpdated 15 min ago
Alexandra Gibbs
@alexgibbsy




Key Points

On Wednesday, stocks in the Asia-Pacific region climbed, building upon gains seen in the U.S., where the Dow Jones Industrial Average soared more than 500 points and other stocks finished the session on a high.
Looking at economic data, composite and services PMI figures for the euro area are scheduled for publication this morning.

European stocks are expected to start Wednesday’s session on a slightly upbeat note, after Wall Street delivered its second best day of 2019 trading overnight.

Ahead of the open, the FTSE 100 pointed to a rise of 4 points at 7,223, while Germany’s DAX popped 13 points at 11,996 and France’s CAC 40 indicated an incline of 9 points, at 5,280, according to IG.

[sarkasm] 05/6/2019 06:10

SCOTSHERALD

58 mins ago
Shell boss underlines appeal of North Sea for oil giant amid Brexit uncertainty
By Mark Williamson Group Business Correspondent
Shell chief executive Ben van Beurden has said the oil giant has a high quality North Sea business

Shell chief executive Ben van Beurden has said the oil giant has a high quality North Sea business
0 comment

ROYAL Dutch Shell chief executive Ben van Beurden has said the oil giant will invest billions in the UK North Sea in coming years in spite of the uncertainty around Brexit.

Mr van Beurden said the UK North Sea forms an important part of the conventional oil and gas portfolio which will remain a key driver of growth as Shell looks to play its part in the transition to a lower carbon energy system.

While Shell slashed investment and jobs in the North Sea in response to the crude price plunge from 2014, Mr van Beurden noted the emphasis has shifted to growth.

At the Anglo-Dutch company’s annual strategy update, he told journalists the slimmed down UK portfolio forms a very high quality business.

This includes stakes in huge new developments West of Shetland along with assets off eastern Scotland and England which Shell reckons have long term potential.

Asked about the potential impact of uncertainty around Brexit on investment, Mr van Beurden said: “In the last few months you will have seen us taking quite a few investment decisions on UK resources.”

He added: “We think we will be investing billions of dollars still in the years to come in the conventional oil and gas business here in the UK, in the North Sea.”

The projects Shell has approved in recent months include plans for an increase in capacity at the Shearwater platform east of Aberdeen and a revamp of the giant Penguins field off Shetland.

Coming soon after Shell’s finance chief Jessica Uhl hailed a “huge step up” at the North Sea business, Mr van Beurden’s comments will boost confidence in the outlook for the area following a tough few years.

The services industry was hammered by the fallout from the oil price drop from 2014 to 2016, which led many firms that control fields to cut spending.

North Sea industry leaders yesterday highlighted other signs of the recovery fuelled by the rise in the oil price from late 2016, amid moves by major exporters to cut production to support the market.

Oil & Gas UK chief executive Deirde Michie noted 13 projects worth £3.2 billion in total were approved last year, with the same anticipated this year.

“Many exploration and production operators are cash flow positive for the first time in years; rebalancing their books and yes paying off debt and giving back to shareholders but also increasing their activity too,” Ms Michie told the trade body’s 2019 conference in Aberdeen.

Shell bosses noted the firm had the potential to pay out $125bn (£100bn) or more to shareholders in the form of dividends and share buybacks in the period of 2021-2025. It is conducting a $25bn buyback programme.

Ms Michie welcomed signs parts of the North Sea supply chain are starting to feel the benefit of the recovery but lamented the fact some firms have missed out.

“With margins remaining under pressure the sustainability of some areas of our supply chain is challenged and so some operators do have a choice,” said Ms Michie. “And that is to ensure a better share and more balance in terms of the risk and return now or find yourselves and industry as a whole paying for it sooner rather than later.”

While oil and gas firms have faced pressure to cut production from climate change activists, both Mr van Beurden and Ms Michie said the industry had a key part to play in supporting the energy transition.

Shell is investing heavily in increasing production of gas, which can provide a cleaner way of meeting growing global demand for energy than other conventional sources. It is also encouraging the development of new technologies ranging from wind power to car battery chargers.

Ms Michie said the industry could support an accelerating energy transition through its people, expertise and infrastructure, while meeting much of the country’s oil and gas needs.

Shell said it expect to fully sustain its upstream exploration and production business through the next decades, with heavy investment in areas such as the USA in prospect.

It is also targeting growth in areas like liquefied natural gas, petrochemicals production and the emerging power business.

Distributions to shareholders for the 2016 to 2020 period are set to total $90bn.

The group said: "Shell expects to increase the dividend per share when there is line of sight to the completion of the $25 billion share buyback programme."

[waldron] 05/6/2019 04:54

Asian stocks advance following strong gains on Wall Street
Published 4 hours agoUpdated 2 hours ago
Eustance Huang
@EustanceHuang




Key Points

Asian stocks traded higher on Wednesday morning.
U.S. stocks jumped overnight as the major indexes all rose more than 2% each on the day.
The moves came as U.S. Federal Reserve Chairman Jerome Powell said the central bank will “act as appropriate to sustain the expansion.”

[sarkasm] 04/6/2019 20:51

What with all this fanastic news today, can anybody hasard a guess as to why the share price remained flat
to negative when comparedwith other energy companies


or are we getting ahead of the big rise before the weeks out

[sarkasm] 04/6/2019 19:29

Electric Power 04 Jun 2019 | 14:48 UTC London

Shell sees 'signficant' potential in electricity, but investing 'with care'

Author Stuart Elliott Editor Alisdair Bowles Commodity Electric Power

London — Shell sees potential for its fledgling electricity business to become "significant" in the future -- sitting alongside oil, gas and chemicals as a core business segment -- but the company plans to take a cautious approach to spending in the near future, CEO Ben van Beurden said Tuesday.
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Speaking Tuesday at Shell's management day in London, van Beurden said the traditional utility business model was changing, bringing more risk and complexity, but also the potential for higher returns.

But, van Beurden said, the returns Shell achieves will drive the pace of growth in the power sector.

"We will plan our steps carefully and we are investing with care. We have to prove the investment case before we scale up this business," he said.

"We cannot get ahead of ourselves. We have to see if we can prove these business hypotheses," he said.

Van Beurden said Shell plans to spend $2-3 billion per year on new energies from 2021 to 2025, up from a total spend of just $1.6 billion since it created its new energies business segment in 2016.

INVESTMENT CRITERIA

Speaking later Tuesday to analysts, Shell's head of integrated gas Maarten Wetselaar said that the rampup in spending would be subject to several criteria.

"First, that business must demonstrate that it is on a path to be self-funding before 2030," Wetselaar said.

"Secondly, our investments must meet certain financial milestones that we establish for every investment. And last -- and as we have said many times before -- it must deliver returns in the 8% to 12% range. All these three conditions will need to be met for us to scale up," he said.

Wetselaar also said trading would be at the heart of its integrated approach to electricity as the company looks to be "asset-light" in the power sector.

"We will be involved in generating electricity with assets where this adds portfolio value and where the returns meet our criteria, but always with a preference to be asset-light and buy the balance of the power from other producers," he said.

Shell CFO Jessica Uhl added that gas-fired power generation assets could form part of Shell's power strategy in the future, but that owning CCGT assets was "not a priority.""There may be CCGT in there," Uhl said, pointing instead to Shell's existing portfolio of wind and solar power generation assets, including in the Netherlands and the US.

SMART SOLUTIONS

Wetselaar said Shell's core markets for electricity supply were in Northwest Europe, the US and Australia, countries where Shell's customers want "low-carbon alternatives.""Beyond these markets, we may be involved in select markets where the opportunity makes sense," he said.

Shell is also looking to expand into other areas of the power value chain, including in smart battery storage systems and electric vehicle charging in Europe and the US.

"Now we are looking to stitch these together, for example, by offering our Shell energy customers energy solutions to charge an electrical vehicle along major highways and at various charging points in addition to providing them with 100% renewable electricity and offer them a solar battery in the process," Wetselaar said.

--Stuart Elliott, [e-mail]

--Edited by Alisdair Bowles, [e-mail]

[waldron] 04/6/2019 18:02

Brent Crude Oil NYMEX 61.81 -0.29%
Gasoline NYMEX 1.76 -0.73%
Natural Gas NYMEX 2.40 -2.40%
(WTI) 53.63 USD +1.53%

FTSE 100
7,214.29 +0.41%
Dow Jones
25,223.35 +1.63%
CAC 40
5,268.26 +0.51%
SBF 120
4,160.67 +0.49%
EuroStoxx 50
3,333.49 +1.10%
DAX Index
11,971.17 +1.51%
Ftse Mib
20,235.41 +1.82%


Eni
14.018 +1.43%

Total
47.22 +1.09%


Engie
12.655 +1.12%

Orange
13.81 -2.40%

Bp
544.6 +0.11%

Vodafone
133.68 +2.86%

Royal Dutch Shell
2,459 -0.55%


Royal Dutch Shell
2,479 -0.34%

[fjgooner] 04/6/2019 16:40

Well you certainly are a long term holder and supporter of the company. Good to see you posting here from time to time.

All the best,

FJ