Billion dollar question

ogci

“You spent more on this event than you do on renewables,” claimed a protester’s banner outside the Shard, the UK’s tallest building, last Friday.

The message was aimed at participants in the Oil and Gas Climate Initiative (OGCI) – some of the world’s largest oil and gas companies including Saudi Aramco, Shell, BP, Total, Italy’s Eni, Norway’s Statoil and Spain’s Repsol. Seven chief executives assembled in the Shard to pledge a total investment of $1bn over 10 years “to develop and accelerate the commercial deployment of innovative low emissions technologies”.

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Another pipeline ensnared

What’s the biggest news in US energy infrastructure these days? Ask a 2nd grader.

As I sat with my 7-year-old in the elementary school cafeteria one morning this week, one of her friends ran up with some shocking news: ‘bad guys’ are trying to build a pipeline that will leak chemicals into a river that Native Americans own! And with that, the Dakota Access pipeline construction project joins a growing list of mainstream energy boogeymen.

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The new normal?

Nymex WTI crude futures have only settled above $50/bl for four days this year. That’s been enough to spur a few US independents to announce mergers, increase capital outlay and step up drilling activities.

Crude futures have nearly doubled from the lows below $30/bl seen in the first quarter. Decisions by a handful of producers like Marathon Oil and Pioneer Natural Resources to loosen the purse strings points to the resilience of the US unconventional industry and shows how far the sector has come in terms of lowering costs and improving efficiency.  Continue reading

All eyes on Permian

As US crude prices breach $50/bl, all eyes are on the Permian basin, the Texas/New Mexico oil field that is most likely to lead a step up in drilling activity. The Permian is the playground for some of the most resilient US shale operators, such as Pioneer Resources and Occidental Petroleum.

Rig counts have fallen in the Permian basin during the price downturn, but it has stood out as one of the most resilient basins. The rig count in the Permian dropped by 39pc from 233 a year ago, compared to a  72pc drop in Texas’ Eagle Ford shale (to 29 rigs) and a 71pc drop in the Williston basin in North and South Dakota, (to 22 rigs).   Continue reading

ExxonMobil’s TMI issue

With $12bn raised in a recent debt offering and more than $300bn of its own shares held in treasury, ExxonMobil has the dry powder to purchase just about any oil and gas company in the world.  From Anadarko to Devon to even BP, the regular rumblings of an acquisition bid are rarely dismissed completely for one reason – ExxonMobil has the resources to do it.

But chief executive Rex Tillerson told analysts in New York City last week the company is in no hurry when it comes to M&As, and that most potential takeover targets are either overburdened with debt or their stock price diluted by repeated equity sales to raise funds.  Continue reading