Profile cover photo
Profile photo
Ohill
3 followers -
Utility/Energy
Utility/Energy

3 followers
About
Posts

Post has attachment
Public
Add a comment...

Post has attachment
Public
#OhillOilCompany
Nigeria Continues To Claw Back Money From Oil-Sector Players:

Nearly three and a half years after the Berne Declaration (BD) published its explosive report, “Swiss Traders’ Opaque Deals in Nigeria,” alleging billion dollar fraud in oil trades and the controversial crude oil for petroleum products swap program, President Buhari’s government announced in March 2017 that it had reached a settlement with three of the seven Nigerian trading firms with Swiss-based subsidiaries identified amongst the worst offenders of the SWAP contracts. Taleveras agreed to repay $27.2 million in two tranches ($17.2 million followed by a $10 million payment) to the Nigerian National Petroleum Corporation (NNPC). Ontario Oil and Gas Limited agreed to pay $10 million and AITEO Energy settled $202.35 million in outstanding debt with NNPC.

President Buhari cancelled all SWAP contracts in 2015 following an audit that recommended that his admiration conduct a thorough audit of all of NNPC’s Offshore Processing Agreements, OPAs, and Crude Oil Swap deals.

The Berne Declaration report also implicated NNPC in the diversion of billions of dollars through its partnerships with Swiss trading firms Trafigura and Vitol.

These settlements are Nigeria’s the latest efforts to recover fraudulent payment to oil sector firms. In 2016, Nigeria filed suit against Eni, Chevron, Shell, Total and Petrobras accusing the oil majors of $12.7 billion in illegal oil exports.

Per Berne Declaration, “Nigeria is the only major producing company that sells 100 percent of its crude oil to private traders, rather than marketing it itself and benefiting from the resulting added value.” Further, the country has no idea how much oil it produces as it does not meter output either at the wellhead or flowing through pipelines. Instead exports from terminals are used as a proxy for national production. These arrangements, coupled with opaque procurement practices has given rise to an environment susceptible to fraud. President Buhari, who has described the corruption in Nigeria’s oil industry as “mind boggling,” is being urged to invest his political capital to push through reforms.
Photo
Add a comment...

Post has attachment
Public
#OhillOilCompany
North American Recovery Drives Schlumberger Revenue Growth:

Schlumberger (ticker: SLB) announced first quarter earnings today, reporting net earnings of $297 million, or $0.20 per share. Total revenue was $6.89 billion, up from the $6.52 billion earned in Q1 2016. This is the first year-over-year revenue growth the company has seen in the last two years.

The resurgence of U.S. shale drilling has been the primary driver of this quarter’s revenue growth. Drilling and fracturing led revenue growth but artificial lift and surface systems also grew, according to Schlumberger Chairman and CEO Paal Kibsgaard. Like Halliburton, Schlumberger is working to bring its frac fleets and other operations back online quickly.

Schlumberger reports that revenue from its hydraulic fracturing and directional drilling services in the U.S. generated 16% sequential revenue growth and 66% incremental margins. This growth was due in large part to pricing recoveries, as the much-predicted service cost inflation comes to pass.

Gulf of Mexico activity is another story, though. In Schlumberger’s conference call, President of Operations Patrick Schorn noted that the deepwater rig count has dropped by 15 at the end of March, which represents a reduction of 74% compared to activity levels in 2014. Seismic activity has declined by similar levels, “leaving offshore revenues at unprecedented low levels.”

“In parallel with these record low level activity,” Schorn commented, “product and services pricing has in several recent cases fallen to levels that make it impossible for us to uphold our operating standards and at the same time turn a profit in this extremely challenging operating environment. We are therefore in the process of redeploying both service capacity and technical support resources from the U.S. Gulf of Mexico to other more viable markets.”

International activity also has not recovered. Revenue from international markets declined 7% sequentially, from $5.3 billion in Q4 2016 to $4.9 billion in Q1 2017. Seasonal declines in activity were worse than usual, particularly in China, Russia and the North Sea. Lower activity in the Middle East and production constraints in Ecuador also hampered results.

On a positive note, revenues in Latin America and Africa were each flat sequentially, indicating that the regions have reached the bottom of the cycle.

SLB sees four critical areas for oil and gas recovery

Kibsgaard believes that four areas are critical for the oil and gas industry to restore its strength and advance its capabilities:

E&P spending must rise to meet growing hydrocarbon demand in upcoming years
Investments in research and engineering must be protected and encouraged through the entire oil and gas value chain
New business models that encourage closer technical collaboration and commercial alignment between operators and suppliers
Broader and more integrated technology platforms that combine hardware, software, data, and expertise

OneStim JV with Weatherford combines frac fleets

Schlumberger and Weatherford announced the creation of OneStim in late March, a joint venture to combine the companies’ pressure pumping services. Schlumberger and Weatherford will own 70% and 30% of the venture, respectively, but Weatherford will contribute approximately 40% of the assets in this venture. Schlumberger will make up the difference with a $535 million payment to Weatherford at transaction close. This joint venture will create a pressure pumping player that rivals Halliburton in scale, and accomplishes Weatherford’s goal of selling off its pressure pumping business.

Q&A from SLB Q1 2017 conference call

Q: So, Paal, so could we go back to the U.S. a little bit? And obviously, the OneStim is a surprising JV and interesting to see. So could you talk a little bit about your strategy there as far as redeploying the frac plate into the U.S. market? And if you could even have a target horsepower as you exit 2017? And maybe a little bit about the logistics of the JV.

Kibsgaard: Yes. I think we need to separate the JV from our current hydraulic fracturing business in North America land. The JV will, obviously, include all that business when it’s closed. But as of now, we continue to manage our business in a standalone fashion, while we are preparing to close the JV as soon as possible. So I will comment briefly on our plans for activation of capacity for the base business today, and I’ll have Patrick give you a few comments around the OneStim JV and the plans post closure.

So if you look at the situation today on our fracking business, we always said that as soon as we have a clear pathway towards profitability, we will start actively reactivating our idle capacity. This point in time actually passed in the first quarter, so towards the back end of the first quarter we actually started actively reactivating our idle capacity. And this process is going to accelerate in the second quarter and also going into H2. So based on the current plan we have at this stage, we plan to have our entire idle capacity from the Schlumberger side deployed during the fourth quarter of this year. So this is the current plan of reactivation.

We are getting significant traction on pricing. We are actively hiring people both for the well side operations and for the vertical integration part, including the transportation side of things as well. And I think the balance we have between the in-sourcing of our vertical supply chain, together with still a very close working relationship with our suppliers – and just to be clear, we are not looking to fully vertically integrate. We will have a certain amount of our capacity vertically integrated, and we will continue also to work closely with our suppliers both on the sand mine side as well as transportation and distribution.

So we will continue now in the coming quarters to actively redeploy. And, obviously, when we close the OneStim JV, these resources and these businesses will all be combined in OneStim, which will then just continue on the same process.

So, Patrick, you want to say a few words about where we stand on OneStim and plans?

Schorn: So regarding the OneStim joint venture, which is a 70/30 joint venture with Weatherford for North America land for hydraulic fracturing and completion, it really creates a new industry leader in terms of hydraulic horsepower and multistage completions. Through its scale, it will offer a cost-effective and competitive service delivery platform, which is uniquely positioned to provide customers with leading operational efficiency and best-in-class hydraulic fracturing and completion technologies. Importantly, reliable equipment availability for our customers and it will also improve significantly the full cycle shareholder returns from this particular market.

So in this case, Weatherford is contributing its leading multistage completions portfolio around 1 million horsepower in pumping equipment and pump damper freighting business. And what we will end up with is a very capital-efficient structure pooling the hydraulic horsepower to gain economies of scale, which clearly is very much timed to benefit from the current market recovery.

Q: It seems like IOCs just don’t seem eager to invest offshore. We haven’t really seen much on the step out and tieback front. I was just wondering if you could maybe elaborate. We’ve talked in the past maybe five-day big projects potentially being announced in the back part of the year. Has your views on offshore shifted a little bit? I was just wondering if you could help us kind of what is the roadmap you think to recovery in offshore. Is this getting pushed out maybe more into 2018 event and when we start to see some of these projects awarded?

Kibsgaard: Yeah, we see the same as you? If you look at jackup utilization, I think there is a slight uptick on it, so I think there is probably some early signs that we’ll get some light work coming our way as an industry in the next couple of quarters. But in terms of bigger projects, I agree with you, we haven’t seen anything yet.

So I think the main thing here is for the IOC customers to basically get a better medium-term view on oil prices. But I would assume that they’re also looking for what the floor could be and maybe awaiting potentially what OPEC is going to do as we go into the late May meeting around whether they extend the production cuts or not.

I think the increase in offshore activity or shallow water activity is probably more going to be a second half of the year event leading into 2018. So with that, though, it’s still very important for us as a company to at least secure the work that is coming out of projects that are being FID’d, and that’s why we are very happy and excited the fact that we landed the Mad Dog 2 project, for instance.
Photo
Add a comment...

Post has attachment
Public
#OhillOilCompany
Exxon Won't Get Drilling Waiver for Russia, Treasury Chief Says:

Exxon Mobil Corp. won’t be allowed to bypass U.S. sanctions against Russia to resume drilling for oil in a joint venture that seeks to tap billions of barrels of that country’s crude.

Treasury Secretary Steve Mnuchin said the decision was made after consultation with President Donald Trump, according to a statement on Friday. Exxon’s request for a drilling waiver dated to 2015, according to a person with knowledge of the matter who wasn’t authorized to speak publicly. The company has pushed for approval every few months since then, the person said.

Prior to Friday’s rejection, Exxon received three waivers to conduct unspecified paperwork for its venture with Moscow-based Rosneft PJSC, according to filings with the U.S. Securities and Exchange Commission. The waivers were approved twice in 2015 and again in October. The first came just months after the U.S. and European Union imposed wide-ranging sanctions that shut down a drilling project by the two companies in the Kara Sea, the documents showed.

The documents on file specify "limited administrative actions” but add no other detail.

Exxon has been eager to unlock the vast crude bonanza locked in Russia’s Arctic, Black Sea and Siberian shale since 2011, when then-CEO Rex Tillerson signed a watershed cooperation plan with Rosneft that was blessed by Russian President Vladimir Putin. At the time, Putin estimated the venture ultimately would invest as much as $500 billion over a span of decades.

The venture came to a standstill in 2014, when the U.S. and EU resorted to sanctions to punish Putin’s regime for annexing the Crimean peninsula and backing Ukrainian separatists.

Tillerson, who left Exxon in January to become U.S. secretary of state, has vowed to recuse himself from any issues related to the company for two years.

Exxon executives have rankled at a loophole in the EU version of sanctions that grandfathered in existing projects. As a result, Italian oil major Eni SpA has been able to continue exploring the Russian sector of the Black Sea for oil after Exxon was forced to suspend plans to drill.
Photo
Add a comment...

Post has attachment
Public
#OhillOilCompany
OPEC Panel Recommends Six-month Extension of Oil Output Cuts:

An OPEC and non-OPEC technical committee recommended that producers extend a global deal to cut oil supplies for another six months from June, a source familiar with the matter said, in an effort to clear a glut of crude that has weighed on prices.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market.

Compliance numbers were also reviewed at the meeting in Vienna on Friday that comprised of officials from countries monitoring adherence to agreed output levels, namely OPEC members Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman.

Overall compliance with pledged cutbacks stood at 98 percent in March, a source said. Two sources said the rate in March represented an increase from February's level.

Oil prices still declined on Friday, with Brent crude trading below $52 a barrel LCOc1 on concerns that increasing U.S. production and high inventories would thwart the efforts by OPEC and its allies to curb supplies.

The committee's recommendation that the supply cut deal be extended was not a surprise, after oil ministers from top exporter Saudi Arabia and Kuwait gave a clear signal on Thursday that producers planned to prolong the accord.

Russian Energy Minister Alexander Novak said on Friday a decision on extending the pact had not yet been taken, but would be discussed with OPEC on May 24. OPEC ministers plus their non-OPEC counterparts are scheduled to meet on May 25.

The meeting also discussed OPEC's own compliance, which it put at 103 percent, in line with figures published in OPEC's most recent monthly report. [OPEC/M]

The panel, which met at OPEC's Vienna headquarters, is the Joint Technical Committee (JTC) established in January to monitor adherence to supply cuts.

Top OPEC producer Saudi Arabia is also a member of the JTC in its capacity as 2017 OPEC president.
Photo
Add a comment...

Post has attachment
Public
Add a comment...

Post has attachment
Public
Add a comment...

Post has attachment
Public
Add a comment...

Post has attachment
Public
#OhillOilCompany
The Green Revolution Is Coming – Is Trump On Board?

During the presidential campaign, Donald Trump seemed to advocate industrial policy to bolster global competitiveness of American business. But the idea that the government should choose winners and losers disturbs political conservatives who believe that the market should make the choices.

Whether that faith in markets is appropriately placed or not, that belief is at the core of our present day neo-liberal political consensus. It is more than a little ironic that our President, in many campaign address-es, focused attention on the need to resuscitate declining nineteenth century industries, like coal, with government support of one sort or another. We're sure that apostle of free markets, F.A Hayek, would've given Trump's plan the raspberry. The same goes for legendary management guru, Peter Drucker, we sus-pect.

But an industrial policy has not materialized. Instead, what has emerged is standard Republican deregula-tion policy. The government has begun to dismantle rules aimed at reducing power plant CO2 and methane emissions, protecting streams, improving automobile mileage and a requiring that financial firms act in a fiduciary manner towards their customers. The administration claims the rules increase costs, hinder busi-nesses unfairly and inhibit job formation.

To make room for higher defense spending, the President's proposed 2018 budget slashes research and development (R&D) spending at many federal agencies. It eliminates ARPA-E (the energy venture capital fund), and cuts R&D spending by 52 percent at the National Oceanographic and Atmospheric Administra-tion (NOAA), by 20 percent at the Environmental Protection Administration (EPA), by 17 percent at the Na-tional Institutes of Health (NIH), by 10 percent at both the Department of Energy (DOE), and the U.S. Geo-logical Survey (USGS) and by 6 percent at National Aeronautics and Space Administration (NASA). No word yet from National Science Foundation (NSF), National Institute of Standards and Technology (NIST) or the U.S. Department of Agriculture (DOA).

In the utility and energy sectors, the public will benefit if deregulation lifts burdens on business that do not produce commensurate benefits to the public. The resulting savings, if any, can be passed on to consumers in the form of lower prices. On the other hand, these new savings can be used to expand the business and hire more employees. That’s the theory anyway.

We believe that the new regime in Washington will have a minor impact on the domestic energy and utility sectors. Utilities could extend the lives of aging coal fired power generating facilities, especially those where environmental retrofits would be uneconomic or impractical. Nevertheless, we do not expect a rush to construct new coal plants. The economics simply aren't there. Domestic natural gas is too cheap, as is wind power throughout much of the Midwest, from the Dakotas down to Texas. And lifting environmental restrictions on the U.S. natural gas industry will keep production costs low--making the competitive ad-vantage over coal even greater. The new rules, however, could protect the already thin margins of power producers insofar as they could avoid near term, environmental control costs.

Killing off tax subsidies to renewables might slow their installations but renewable costs have come down so far that many projects could compete with or without subsidies. The real problem is that electric de-mand growth is so anemic that few new power plants are needed, except to cut emissions and replace old plant.

We doubt that investors will put up new coal stations unless they could meet environmental restrictions that future administrations might impose. Putting domestic coal back in the electric power generation pic-ture, then, will requires processes that either can "scrub" coal of its objectionable polluting emissions or sequester them. All this has to occur against the backdrop of plentiful gas and relatively cheap wind power. Perhaps the coal industry, while requesting relief of all environmental obligations, should request increased governmental help for R&D expenditures to help it produce a competitive product.

The international market for environmental and electrical equipment exceeds that of the U.S. alone. Most of our major trading partners not only have an industrial policy for the energy sector but often own the companies within them. American firms have to compete with those companies. China has a “Made in Chi-na” policy — that’s what they call it — for science and technology products, “the main battlefields of the economy”, according to Chinese president Xi Jinping. The government targets a sector for expansion, di-rects billions of dollars to its development, keeps foreigners out of the domestic market so the local firms can achieve scale and then launches the expansion overseas. That’s the competition. We can proclaim "free markets, free markets" all we want. But in the international energy business outside of the U.S., vir-tually all of the competitors are government owned and controlled. That's the playing field--whether level or not.

Renewables are the fastest growing sector in the energy market. The two largest coal -dependent coun-tries, China and India, which did their best to sink the Copenhagen climate talks, have set their sights on replacing coal with renewables. India, where the government also owns the coal company, plans to triple renewable capacity by 2022. At a power contract auction held earlier this year, the solar power bidder won against a new coal plant. As it is, old coal facilities are operating at a low level of capacity and experts doubt that many of the coal-fired plants listed for construction will get built.

In China, the grid has been building ultra-high voltage DC lines to carry renewables from the distant prov-inces to urban load centers. This transmission technology is a new product to sell to the world. In both countries, the growth of electricity demand has slackened, following the pattern in more developed na-tions, thereby making a transition to lower carbon electricity easier.

The major industrial nations apart from the U.S. have accepted the notion of human induced climate change. Their energy suppliers and manufacturers, no doubt sensing opportunity, have decided to tackle climate mitigation as a business, often with government help.

In the United States, however, the Trump administration’s skepticism about climate change, and the R&D cuts that follow, are likely to relegate U.S. firms to the low tech, slow growth, commodity end of the en-ergy sector. But maybe not.

Analogously, conservative Republicans in the U.S. Congress (the Freedom Caucus of yesteryear) have fought tooth and nail to abolish the Export-Import Bank. and they hoped that the Trump administration would finally kill the beast. They viewed its activities as corporate welfare for big business. Perhaps they were right.

But other countries provide the same guarantees and subsidies to their exporters and the deals don’t get done without them. Getting rid of our subsidies or other forms of government support or ownership for ideological reasons while other countries retain theirs can be likened to unilateral economic disarmament. The Trump administration now supports the need for an Export-Import Bank. Perhaps we will come full circle on climate too and the Pentagon will covertly fund climate related research. If the seas continue to rise as predicted, all those coastal naval installations around the globe will have to be moved somewhere.
Photo
Add a comment...

Post has attachment
Public
#OhillOilCompany
Nigeria’s Navy Thwarts Attack On Oil Products Pipeline:

Nigeria’s navy has foiled an attempt by vandals to break a pipeline operated by the Nigerian National Petroleum Corporation (NNPC) that carries petroleum products from Atlas Cove, Lagos, to Mosimi depot in southwest Ogun state, local media report.

According to Vanguard news outlet, the vandals were spotted on boats on Monday. The Navy deployed patrol boats to the scene but the vandals escaped after seeing the patrol, abandoning four boats and leaving behind 972 empty drums and 595 jerricans. The Navy has recovered the abandoned boats and found three pumping machines, three coils of rubber hoses and 14 outboard engines that would have been used for theft if the attempt had not been foiled.

Earlier this month, NNPC said that loading at the Mosimi resumed after a halt that had lasted almost a year due to vandalism along the Atlas Cove-Mosimi Pipeline Right of Way (PROW).

Despite the Nigerian government’s continuous efforts to prevent oil infrastructure vandalism, the number of downstream pipeline sabotages in the country jumped by 233 percent between December 2016 and January 2017, NNPC said in its Financial and Operations report earlier this month.

Last December, there were 18 downstream pipeline vandalized points, while the points of vandalism numbered 60 in January this year – a 233-percent surge, “despite the Federal Government and NNPC’s continuous engagements with the stakeholders,” NNPC said.

Most recently, however, Nigeria plans to continue ramping up its crude oil output. The country, which is exempt from the OPEC production cut deal because its market share was severely affected by militant activity in the Niger Delta, is planning to complete repair work on the Forcados pipeline and maintenance at the Bonga field by July.

Following these, crude oil production should rise to 2.2 million barrels daily, from 1.27 million bpd in March. Last month’s figure was affected by maintenance at Bonga, which produces 225,000 bpd.
Photo
Add a comment...
Wait while more posts are being loaded