Shell Share Discussion Threads

[florenceorbis] 08/6/2019 08:00

l 07 Jun 2019 | 18:56 UTC St. Petersburg

European oil majors brave sanctions risk to sign new energy-cooperation deals with Russia

Author Rosemary Griffin Editor Pankti Mehta Commodity Oil

St. Petersburg — European oil majors including Shell and OMV signed new cooperation deals with Russian energy companies during the St. Petersburg International Economic Forum this week, in a sign that they were willing to make new investments despite risks of potential new sanctions.
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Since 2014 when the US and other Western countries introduced sanctions against Russia, Russian energy companies have operated with limited access to Western financing and some type of oil production technology.

This had made Western majors more cautious about signing up to new investments, with some companies winding down cooperation that could be in breach of sanctions.

Cooperation on conventional hydrocarbons projects continues to grow, however. Deals signed this week included Shell, Gazprom Neft and Spain's Repsol agreeing to jointly develop hydrocarbons projects in the Russian Arctic. This followed an agreement Thursday between Shell and Gazprom Neft to set up a West Siberian oil joint venture to develop fields with combined estimated reserves of more than 8 billion barrels.

Other deals included Austria's OMV agreeing to purchase terms for a stake in a gas project in northern Russia, as well as a preliminary LNG deal with Russian gas giant Gazprom.

There are also signs that Russian and Western companies are considering to increase cooperation in other countries.

Gazprom Neft CEO Alexander Dyukov said the company may work with Shell on projects abroad.

Meanwhile, Total and Siemens agreed to cooperate on an LNG project in Vietnam with Russia's Novatek and Zarubezhneft.

The CEOs of ExxonMobil and BP also took part in the forum, meeting with Russian officials and discussing cooperation with existing partners.

REDUCED SANCTIONS RISK

The deals come at a time when some analysts believe that the risk of new sanctions being introduced against Russia has receded.

"Targeted US sanctions against Russia remain possible, from issues ranging from Sergei Skripal, to Ukraine, to US election interference. However, the lack of major new revelations regarding Russia in the Mueller report reduces the odds of major sectoral sanctions targeting Russia's upstream energy production," Platts Analytics' Paul Sheldon said.

In the past, Russia's close relationship with Iran and Venezuela sparked speculation that the US administration's sanctions targeting those two countries could include secondary sanctions against Russian energy projects.

"Secondary sanctions related to Russian dealings with PDVSA or Iran, if announced or implemented, would be unlikely to target Russian upstream oil production at this point," Sheldon said.

Russian officials also used the forum as a platform to warn of the impact of sanctions. Energy minister Alexander Novak said that sanctions are leading to increased interest in establishing alternative payment systems and switching to trading in national currency.

A key concern among Russian officials is that future US sanctions against the country could restrict Russian companies' access to the US dollar. Since they first started testing the viability of using alternative currencies in the wake of sanctions in 2014, rising global trade tensions, most notably between the US and China, have made some of its major partners more receptive to non-dollar trade.

The importance of the US dollar in oil trading and the considerable additional forex risks associated with alternative currencies have lead most analysts to forecast that a major switch away from the dollar is unlikely in the near future.

-- Rosemary Griffin, [e-mail]; Nadia Rodova, [e-mail]

-- Edited by Pankti Mehta, [e-mail]

[lippy4] 07/6/2019 22:04

seems you cannot win when people want less oil used yet this article is complaining that shell is not finding enough oil to feed the need in the world.

i notice they dont mention gas.

[sarkasm] 07/6/2019 21:09

FORBES

Jun 7, 2019, 03:28pm
How Royal Dutch Shell Is Setting A Bad Example Amid The Peak Oil Demand Hysteria
Ellen R. Wald
Ellen R. Wald
Senior Contributor
Markets

In 2004, a mania grew in the financial and energy circles around the idea of peak oil. The notion that the world was running out of oil became a commonly held belief, which, in turn, helped push oil prices well above $100 per barrel.
BRITAIN-EARNINGS-ENERGY-SHELL

Royal Dutch Shell chief executive Ben van Beurden speaks at a full year results conference in London on January 31, 2019. - Royal Dutch Shell today said that net profit surged 80 percent to $23.4 billion in 2018, thanks to higher oil prices and costAFP/Getty Images

Fifteen years later, peak oil is still talked about by some, but most industry insiders pay it no heed. Instead, over the last few years, the increasingly popular concept has been peak demand. Peak demand is the idea that the demand for oil will reach an apex and then start to decrease, especially as government regulations require more use of alternative energies and as battery-powered machines, like electric vehicles, will presumably become more popular.

Peak demand may or may come to pass—that is not the concern here. What we do know is that if the peak demand idea continues to gain popularity it will lead to a shortage of oil in the coming years and decades. The idea of peak demand threatens the global oil supply because it incentivizes and even excuses oil companies to stop exploring for and producing (E&P) more oil.

A snapshot of this phenomenon can be found by watching Royal Dutch Shell and its CEO Ben van Beurden. Shell was the top oil and gas company on this year’s Forbes Global 2000 list, and in 2018 it made more than $15 billion in profit with just over $320 billion in revenue. It has a market cap of more than $250 billion. By the standards of modern public companies, it seems to be doing quite well.

But Shell is taking a major risk based on the idea of peak demand and environmentalism. Shell has decided to cut back on upstream development, the segment of the oil business devoted to finding and producing oil. Shell’s stock price results may look good now, but its decisions could lead to a major shortage of oil from Shell in the future. Oil is a business that requires long term planning, sometimes a decade or more out. Companies must commit capital expenditures to ensure long term supply of oil. Van Beurden and Shell are proudly moving away from that.
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This week, Van Buerden spoke to investors in New York and London to increase interest in Shell stock, as reported by The Wall Street Journal. Shell is apparently telling investors that it is in the process of “transforming into a cleaner business centered on selling electricity,” and, at the same time, will return at least $125 billion to investors through dividends and share buybacks. This cash, which is about half the size of the company’s market cap, is supposed to come from the traditional oil business.

Even Van Buerden admits that oil demand will exist for decades, so it doesn’t make sense to take $125 billion from the oil extraction business to give to shareholders. The only way this would make sense is if the priority is raising the short-term stock price, not protecting the long-term business interests of the company. The oil business requires long-term planning and long-term investment for returns that do not come for many years down the line. Major stock buy backs and dividends help the stock price, but they do not ensure supplies of oil for decades to come.

There’s nothing wrong with Shell deciding to transition from an oil company into an electricity company, but the world will face a major crisis if other international oil companies like ExxonMobil, Chevron or BP follow suit. Peak oil demand has not come, and we don’t know if it is coming anytime soon. Meanwhile the world needs oil and will continue to need oil.

Ellen R. Wald, Ph.D. is a historian and consultant on energy and geopolitics. She is the author of Saudi, Inc., president of Transversal Consulting & a Senior Fellow at the Atlantic Council.

Ellen R. Wald
Ellen R. Wald
Senior Contributor

[waldron] 07/6/2019 17:09

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Despite this weeks varied news, rdsb ends the week snug in the 2475 to 2575p BOX

[grupo guitarlumber] 07/6/2019 15:19

Gazprom Neft (SIBN.MZ) has signed a memorandum of understanding with Royal Dutch Shell PLC (RDSB.LN) and Spain's Repsol SA (REP.MC) to establish a joint venture aimed at developing license blocks in Siberia, the Russian company said Friday.

Gazprom Neft said the document was signed at the International Economic Forum in St. Petersburg, Russia, and that it expects the deal to close in 2020 when all corporate and regulatory approvals have been obtained.

The licenses contain the Leskinsky and Pukhutsyayakhsky blocks and are located on the Gydan Peninsula. One the deal is closed, Gazprom Neft will hold 50% of the joint venture, while Shell and Repsol will control 25% each.

Both blocks are under-explored and located at a considerable distance from oil-and-gas and transport infrastructure, Gazprom Neft said.



Write to Oliver Griffin at [e-mail]; @OliGGriffin



(END) Dow Jones Newswires

June 07, 2019 06:07 ET (10:07 GMT)

[sarkasm] 07/6/2019 10:59

HSBC Buy ups target from 2,740.00 to 2,860.00 Reiterates

[waldron] 07/6/2019 07:16

StanChart chairman: It’s grown more likely that the world will split in two
Published 2 hours agoUpdated an hour ago
Yen Nee Lee
@YenNee_Lee




Key Points

It’s become increasingly likely that the world will split in two on the back of rising tensions between the U.S. and China, said Jose Vinals, group chairman at Standard Chartered Bank.
He predicted that some countries and companies would operate to western globalization standards, while others would follow eastern norms.
Vinals is not the only business executive that has warned of a potential split in the world. Former Google CEO Eric Schmidt said last year that there would be two distinct internets in the next decade.

[the grumpy old men] 06/6/2019 22:27

Moving average strategies, on the other hand, emphasize what already happened in the rear view mirror. That's no way to drive your portfolio, especially in 2019.

[the grumpy old men] 06/6/2019 22:21

Battery Breakthrough Solves Major Electric Car Problem
By Irina Slav - Jun 04, 2019, 6:00 PM CDT
Join Our Community
Battery pack

It’s no secret that batteries are the most expensive part of an electric vehicle. As such, this is the root of the industry’s problem and a roadblock to making larger strides into the mainstream market. Researchers around the world are racing to solve this problem, and now a team of German scientists say they’ve taken a crucial step in that direction.

The team, from the Fraunhofer Institute for Material and Beam Technology IWS, have devised a new production process for EV batteries that features coating their electrodes with a dry film of chemicals rather than liquids. According to them, this process is less energy-intensive, which means it’s cheaper, and it is also better than the standard process in that it does not involve toxic solvents.

"Our dry transfer coating process aims to noticeably reduce the process costs in electrode coating," project manager Dr. Benjamin Schumm told Phys.org. "Manufacturers can eliminate toxic and expensive solvents and save energy costs during drying. In addition, our technology also facilitates the use of electrode materials that are difficult or even impossible to process wet-chemically."

The latter part of Schumm’s comment is important: in the future, batteries will be a lot more energy dense than today’s version, and this will require the use of these materials. The team’s binder polymer-based alternative to expensive and toxic wet chemistry comes in anticipation of the batteries of the future, many of which, according to Schumm and his colleagues, will be solid-state.

"These batteries will be able to store more energy in the same volume than today's lithium-ion batteries," the IWS project leader said.
Related: It’s Adapt Or Die For U.S. Refiners

Most battery-related breakthroughs in the news are reported from the lab, and despite assurances that the technology is potentially scalable, few have been actually tested. This is not the case with the IWS electrode-coating process. The institute already has a partner from the manufacturing industry: Finnish BroadBit Batteries. The company has already launched a pilot production unit at a factory and is producing sodium ion batteries using the new coating process, which, in addition to all its other advantages, is also substantially faster than wet chemistry.
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Given all this, the dry-coating tech may someday replace the traditional way of coating electrodes with the chemicals that make them electrodes, and this replacement will allow EV makers to achieve two of their biggest goals: lowering the price of their vehicles and boosting the energy density of their batteries with the use of new chemicals.

European carmakers should be especially happy about the lower battery cost implications of the IWS team’s invention. These have poured billions into their EV production plans but are excessively reliant on imported battery cells. A homegrown cheaper battery production process could help them to reduce this dependence at a crucial moment when EVs, helped by government policies, have a chance to really take off.

A recent study from AlixPartners estimated that “by 2023 a whopping $255 billion in R&D and capital expenditures (will be) spent globally on electric vehicles, and that some 207 electric models are set to hit the market by 2022.”

The bad news is that many of these would not be able to compete “due to currently-high systems costs, low volumes and intense competition.”

The German team’s new production process could help even the playing field.

By Irina Slav for Oilprice.com

[lippy4] 06/6/2019 21:50

mr gooner unfortunately i find formula e a bit boring as the sound and smell of racing cars are what makes it exciting.

its a bit like watching scaletrix..

[fjgooner] 06/6/2019 21:35

Why oil companies are involved in Formula E

Promoted: Why oil companies are involved in Formula E
By Motorsport.com

Shell's presence in motorsport may well be most famously associated with Formula 1, but it has also grown its presence with strategic partnerships in the ABB FIA Formula E Championship.




The Nissan e.dams squad is aligned to Shell in an official partnership and the energy company is also the strategic partner for the Mahindra Racing squad. On the face of it, the presence of a traditional oil company in FE sounds a strange combination, but Shell has shifted itself to become an energy company.

It now produces more natural gas than it does traditional oil (53% compared to 47%) and at the Berlin E-Prix, Shell launched a new range of e-fluids in what it described as a "major milestone" for the company.

While battery technology is in its infancy, immediate gains can be made with specialised fluids that can significantly boost the key areas of power density, the weight and volume of its energy density and the battery lifespan. The various fluids Shell has made are targeted at e-motor cooling, thermal battery management and the cooling of the inverter as well as other key areas of battery performance.

Dr Selda Gunsel leads a global group of scientists and engineers to drive innovation and technology leadership in lubricants, fuels and speciality products.

Gunsel said: "The drivetrain of electric vehicles still have a lot of mechanical components that need to be lubricated and protected against damage, we have bearings in the electric motors, transmission systems that require fluids, greases for bearings and transmission fluids for the transmission systems and we need special fluids for thermal management.

"We have a very long history in being in motorsport to really fuel our lubricant innovations. We have long-term partnerships with Formula 1 and NASCAR and IndyCar in the states. Through our partnership with Nissan, we are expected to make our product better, the track is our research lab and we take our learnings and apply them to everyday products."

As has often been the case, motorsport is the perfect hotbed for Shell to apply its learnings to help inform its direction for the road.

The general manager for electric mobility in Shell new energies, Andreas Lips, has 15 years of experience within the energy company and oversees its movement in the renewable energy industry. He explains why Shell's Formula E partnerships are important.

"There are three things for why we do this [partnership with two FE teams]," explains Lips. "One is to be closer to the OEMs and the partnerships are important and Nissan is one of the leaders in EV production, so it’s a very good partnership we have.

"The other is Formula E has really the latest technology of the cars, so using the electric drivetrain to the extreme. That’s a very good training ground to test the fluids.

"The normal application is not that critical, but if it. It’s also about bringing consumers closer to it and we want to inspire the general public and make it exciting to talk about electric mobility."

Shell's move into FE comes at a time when there are predictions that electrified vehicles will make up 50% all vehicles by 2030, according to IHS Markit's 2018 study.

Its fluids can also be applied to hybrid vehicles and it demonstrates the wide-ranging approach Shell is taking in its renewable energy push, with the company also investing in hydrogen power and gas-to-liquid technologies and charging points for both home users and businesses.

[the grumpy old men] 06/6/2019 19:42

Shell, Gazprom Neft Set Up Joint Venture To Develop Oil Fields In Russia
By Tsvetana Paraskova - Jun 06, 2019, 1:00 PM CDT Gazprom neft

Royal Dutch Shell and Gazprom Neft have agreed to create a joint venture that will be exploring and developing oil fields in the Yamal region in Russia, the oil arm of Russian gas giant Gazprom said on Thursday.

Shell and Gazprom Neft have signed the documents to create a 50/50 joint venture that will be managed on an equal basis by the partners in a rare move of an international oil major into Russia’s oil sector, some of which has been subject to Western sanctions since the Russian annexation of Crimea in 2014.

The joint venture deal is expected to be finalized in late 2019 or early next year, pending all necessary corporate and regulatory approvals and once all legal preconditions have been met, Gazprom Neft said in a statement.

“As part of this new agreement we will be able to reveal the full potential of what is a major hydrocarbon cluster in Yamal, viably and efficiently. We will be investigating further opportunities for implementing projects with Shell in the future, including projects outside of Russia,” said Alexander Dyukov, Chairman of the Management Board at Gazprom Neft.

Shell’s chief executive officer, Ben van Beurden, also commented on the agreement, saying in Gazprom Neft’s statement that “This is yet another milestone in our partnership with Gazprom Neft. Over the years, we have built a trusted and fruitful relationship.”

Shell and Gazprom Neft have been working in Russia to develop the Salym group of oil fields.

Gazprom Neft plans to invest more in exploration and aims to boost oil production regardless of the ongoing OPEC+ production cuts.

In March this year, Gazprom Neft’s Dyukov said that he did not think the production cut deal between Russia and OPEC would last long, and that the Russian company was not even considering the cuts in its long-term plans. Gazprom Neft said it had plans to maintain or even increase production after 2020.

By Tsvetana Paraskova for Oilprice.com

[waldron] 06/6/2019 18:15

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[ps0u3165] 06/6/2019 08:08

The first shipment of liquefied natural gas (LNG) from Shell’s floating liquefied natural gas (FLNG) facility Prelude offshore Western Australia is imminent, the oil and gas supermajor said on its Management Day 2019 presentation to analysts.

“With Prelude now producing LNG for more than a week and the first shipment of LNG being imminent, we are further de-risking the delivery of our $8-10 billion organic free cash flow target in 2020,” Shell’s Integrated Gas & New Energies Director, Maarten Wetselaar, told analysts, discussing the company’s LNG financial performance and targets.

“Over the past three years we have consistently been growing both our LNG liquefaction and LNG sales volumes,” Wetselaar said.