Oil major Shell on Thursday reported $5.4 billion earnings on a CCS basis, excluding identified items for the first quarter of 2019. This is a two percent drop compared to the first quarter of 2018, but still, a better result than analysts expected.
Shell said the result reflected lower realized chemicals and refining margins, decreased realized oil prices and lower tax credits.
The oil major added this was partly offset by stronger contributions from trading as well as increased realized LNG and gas prices compared with the first quarter of 2018.
According to financial journals, the result came as a surprise to analysts as they’d predicted Shell to earn $4.5 billion for the quarter.
Revenue for the quarter was $83.7 billion, down from $89 billion a year ago. Upstream earnings excluding identified items rose to 1.7 billion, from 1.5 billion in 1Q 2018.
Total oil and gas production fell 2 percent to 3,752 million barrels of oil equivalent per day.
Shell CEO Ben van Beurden said: “Shell has made a strong start to 2019, with the first quarter financial performance demonstrating the strength of our strategy and the quality of our portfolio of assets…Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions.”
As for the upstream portfolio developments, during the quarter, Shell announced first oil at the Petrobras-operated Lula North deep-water development in the Santos Basin offshore Brazil. In April, Shell announced the sale of its 22.5% non-operating interest in the Caesar Tonga asset in the US Gulf of Mexico to Delek for $965 million. Also in April, Shell announced a discovery from the Blacktip deep-water well, located in the US Gulf of Mexico.
Swedish oil company Lundin Petroleum saw its profit drop to $54.9 million in the first quarter of 2019, compared to $228.8 million earned in 1Q 2018. Revenues for the quarter fell to $491.6 million, from $692.9 million a year ago.
Edvard Grieg platform / Image source: Lundin Petroleum
Production declined to 78.8 thousand barrels of oil equivalent per day, down from 83.1 Mboepd in the first quarter of 2018.
Despite the drop in production, CEO Alex Schneiter said the output was at the upper end of expectations, boosted by Edvard Grieg and Alvheim offshore fields in Norway.
Lundin’s quarterly report shows production was 3 percent above mid-point of the production guidance for the quarter and towards the upper end of the guidance range
“This result is due to facilities and reservoir performance at the Edvard Grieg field. Production guidance for the full year remains between 75 and 95 Mboepd, reflecting a range around the expected start-up of the Johan Sverdrup field in November 2019,” Lundin said
CEO Schneiter commented: “At Johan Sverdrup, a significant milestone has been reached with the offshore installation of all the topsides and bridges completed at the end of March, meaning commissioning and hook up has begun in earnest, alongside the tie-back of the eight pre-drilled production wells. With the majority of commissioning for these facilities having taken place onshore and the ability to perform single lift installation using the Pioneering Spirit vessel, I am confident in the expected November 2019 start-up of this world-class asset.”…….
British oil major BP posted a slight dip in the first quarter underlying replacement cost (RC) profit, citing the weaker oil price and margin environment at the start of the quarter.
Thunder Horse platform. Source: BP
The company’s underlying RC profit, BP’s definition of net profit, was $2,4 billion for 1Q 2019, down from $2,6 billion in the corresponding quarter last year.
Upstream production, excluding Rosneft, for the quarter was 2,656 mboe/d, 2% higher than a year earlier due to the acquisition of the BHP assets and growth of major projects.
To remind, BP in October 2019, acquired BHP’s subsidiary Petrohawk Energy Corporation, a wholly owned subsidiary of BHP that holds a portfolio of unconventional onshore US oil and gas assets.
As for the upstream highlights in the first quarter of 2019, BP’s Constellation field in the Gulf of Mexico was the company’s first Upstream major project brought online in 2019. The Constellation start-up was followed by the second stage of the West Nile Delta development, the Giza and Fayoum fields, in Egypt and the Angelin development offshore Trinidad.
“These are the first of five Upstream major projects expected to begin production in 2019. BP has now safely brought 22 new upstream major projects into production since 2016, remaining on track to deliver 900,000boe/d from new projects by 2021,” BP said on Monday……
Shearwater to shoot seismic over Woodside’s SNE field
Geoservices player Shearwater has been awarded a contract for a 3D seismic survey over the SNE field area located in Senegalese waters.
SNE field development; Source: Woodside
Australia’s Woodside is the operator of the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture, which contains the SNE field development. Other partners in the field are Cairn Energy, FAR Limited, and Petrosen.
In a 1Q 2019 update on Tuesday, FAR said that, subsequent to the quarter, Shearwater had been awarded a high-definition 3D marine seismic survey contract to improve reservoir definition supporting SNE well positioning and optimization.
FAR also added that the survey is scheduled to start in June 2019. However, the company has not the revealed further details about the contract.
Shell to drill Selene prospect ‘soon’ as it farms into Cluff’s N. Sea block
Oil major Shell has exercised its option to farm into Cluff Natural Resources’ Southern North Sea License P2437, containing the Selene prospect that is planned for drilling “at the soonest possible opportunity.”
According to Cluff, which shared the piece of information on the farm-in on Tuesday, Shell will receive a 50 percent working interest in the license. Cluff’s data shows that the Selene prospect’s size is estimated at 291 BCF (P50 Gross Prospective Resources), and the prospect is considered low risk with an estimated Chance of Success of 39%.
Shell will pay a total consideration of $600,000 to Cluff following completion, part of which was received in February 2019.
Completion of the farm in is conditional on the entering into of a Joint Operating Agreement and obtaining regulatory consent from the Oil & Gas Authority (the “OGA”).
Application for OGA consent will be made immediately and completion is expected before the end of Q2, Cluff said. Cluff further said that on completion of the farm in, Shell has indicated its intention to commit to drill an exploration well on the Selene Prospect “at the soonest possible opportunity.”
Under the Option Agreement, Shell will pay 75% of the cost of an exploration well, including testing, subject to an aggregate cap of USD$25,000,000.
Shell will pay 75% of the cost of an exploration well, including testing…..
U.S. oil major ConocoPhillips reported an increase in its quarterly earnings on the back of higher output when compared to the prior-year period.
ConocoPhillips on Tuesday reported first-quarter 2019 earnings of $1.8 billion compared with first-quarter 2018 earnings of $0.9 billion. Excluding special items, first-quarter 2019 adjusted earnings were $1.15 billion compared with first-quarter 2018 adjusted earnings of $1.14 billion.
The company’s first-quarter production excluding Libya was 1,318 MBOED, an increase of 94 MBOED compared with the same period a year ago. Year-over-year underlying production grew 5 percent overall and 13 percent on a per debt-adjusted share basis…..
OTC: Schlumberger EM technique detects formations ahead of drill bit
Schlumberger has unveiled IriSphere, a new service which applies electromagnetic technology for detecting formation features ahead of the drill bit in oil and gas wells.
May 7th, 2019
IriSphere
Offshore staff
HOUSTON – Schlumberger has unveiled IriSphere, a new service which applies electromagnetic (EM) technology for detecting formation features ahead of the drill bit in oil and gas wells.
The service, which underwent more than 25 field trials across Asia, Australia, Latin America and Europe, employs EM-based resistivity measurements more than 100 ft (30 m) ahead of the drill bit.
These are then compared to a prepared model that incorporates offset and other data to reveal what the company says is a true down-range representation of the formation while drilling. Operators can as a result take proactive decisions rather than reacting to measurements at or behind the bit while drilling wells.
Tarek Rizk, president, Drilling & Measurements, at Schlumberger, said the company created IriSphere service in response to client requests for risk reduction, improved drilling efficiency, and optimal casing point selection.
“Knowing what conditions lie ahead of the bit while drilling enables operators to reduce uncertainties and minimize costs by identifying geological features and deciding which actions to take before encountering them,” Rizk explained.
The field trials included successful detection of reservoirs and salt boundaries, identification of thin layers, and avoidance of drilling hazards such as high-pressure formations that can lead to wellbore stability issues.
One client offshore Western Australia used IriSphere in a previously unexplored part of a field to detect the reservoir 62 ft (19 m) ahead of the bit while drilling and determine reservoir thickness to be 82 ft (25 m).
This dispensed with the need for a pilot hole, and subsequent coring operations were optimized based on data acquired while looking ahead of the drill bit.
When Denmark’s state energy company changed its name in 2017, almost everyone involved agreed it was high time: after all, it was called DONG Energy. (It originally stood for Danish Oil and Natural Gas.)
The revamp was also part of a move to get out of the oil and gas business and focus on offshore wind, where the company has become a world leader. But changing its name to the hard-to-pronounce Ørsted, after one of the country’s best known scientists, turned out not to be the controversy-free choice management had envisioned.
Other energy companies in Europe that have changed their names have faced charges of “greenwashing,” or scrubbing their branding of fossil fuels while failing to do the same to their portfolios. Ørsted (pronounced “Ehr-still”) side-stepped such allegations, but it still confronted opposition: from the Ørsted family itself.
On Friday, the energy company won a court battle to keep the Ørsted name brought by seven descendants of Hans Christian Ørsted, the scientist who discovered electromagnetism.
The family members filed the lawsuit in January 2018, objecting to their newfound association with the company. They argued the Ørsted name is rare and significant enough to be off-limits.
The judge didn’t agree; it should be noted that about 1,200 people in Denmark now have Ørsted as a middle or last name—including the pop star MØ. (Interestingly enough, the company ran into a similar—albeit less litigious—problem when selecting its earlier name of DONG. In addition to snickers by English speakers, the Dong family of Valby, Denmark was not thrilled, though it never pursued legal action.)
Ørsted stands out for its legal tiff, but in the world of energy, it’s just one more company changing its name to eliminate words like “oil” or “gas.” Norway’s state energy company, for instance, changed its name from Statoil to Equinor last year. The company says the change reflects the country’s shift away from petroleum extraction to renewable energy, but it’s been accused of using a rebranding effort to make itself appear more “green” than it really is.
And there are others: Finland’s Neste cut the “oil” from “Neste Oil” in 2015, the same year France’s GDF Suez (GDF stood for “Gaz” or gas “de France”) changed its name to Engie.
The transitions presented new, and often more “sustainable,” images—not uncommon for energy companies as a whole these days. That was Ørsted’s official reason, too: the company has become the world’s largest producer of offshore wind energy. The Danish state has a 50.1% ownership stake in Ørsted.
But embarrassment was something of a factor too: “DONG,” while innocuous in Denmark, tends to have a different meaning among English speakers.
Meanwhile, the debate over the company’s new name is not necessarily settled: Friday’s ruling in Ørsted vs. Ørsted could be appealed, the family’s lawyer, Jens Jakob Bugge, told Fortune. If so, he said, it could end up before the Danish Supreme Court.
“Steve is a born and bred Aberdonian who is held in high regard within the global oil and gas community having spent more than 35 years working in the industry. He began his career in the early-1980s as an offshore technician and worked on many North Sea installations before being assigned to Piper Alpha.
“His escape and survival from the platform on the night of 6th July 1988 left him with an unquenchable desire to make a positive change in the safety culture across the industry,” the organization said in an announcement on Wednesday.
Rae, who has in his career worked for Noble Drilling, Seawell, and Archer said: “Words cannot express how honored I feel to have been appointed as the Executive Director of Step Change in Safety. For me, the role presents a once-in-a-lifetime opportunity to play a significant part in shaping the future safety culture in our industry. Those who know me personally, or have heard me talk, will appreciate how much this means to me.”
“I look forward to taking up my new position in July and until such time I will continue to give my current employer, Well-Safe Solutions my full attention during this exciting part of their journey.”
In 2007, Rae was a member of the Leadership Team at Step Change in Safety, responsible for planning and monitoring the activities of the organization.
According to the organization, his other past industry roles include: Director, OPITO; Chairman, North Sea Chapter; and Director, International Association of Drilling Contractors (IADC). In 2013, the IADC recognized Steve with the ‘Val Hood’ award for his services to the Drilling Industry.
Bob Fennell, member of the Step Change in Safety Board and co-Chair of the Leadership Team said: “For me, Steve’s appointment was the easiest decision I’ve ever had to make as he is perfect for the role. He has an established industry presence and is a great orator and business leader. Most importantly, Steve genuinely wants to make the UK oil and gas industry a safer place to work for its workforce.”
Chevron to acquire Anadarko 04/12/2019 Rystad Energy’s global oil and gas production outlook Offshore staff SAN RAMON, California – Chevron Corp. has entered into a definitive agreement with Anadarko Petroleum Corp. to acquire all the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion. The acquisition consideration is structured as 75% stock and 25% cash, providing an overall value of $65 per share based on the closing price of Chevron stock on April 11, 2019. …..
