Daily Archives: April 28, 2009

Carola Hoyos

It appears not only Christophe de Margerie of Total believes oil prices will eventually recover: UTS Energy shareholders rejected Total’s deep pockets and diversified portfolio, ending the French company’s attempt at a hostile takeover.

The key question for shareholders was whether Fort Hills, UTS’s Athabasca oil sands play, would be developed. The answer depends in large part on whether future oil prices will be high enough to justify the environmentally messy and expensive venture.

The mining project is already delayed past its 2012 production start date and other partners Petro-Canada and Teck-Cominco are in a spot of disarray with mergers, cold feet, low oil prices and high costs making some chief execs stand back, do nothing and even consider hoping for good offers.

And what about UTS? One hint that shareholders may not be rejoicing quite as much as the past lobbying effort against Total by West Face Capital, UTS’s largest shareholder, would suggest, is today’s share price: UTS shares slid as much as 24 per cent to well below Total’s offer. Makes one think Total’s second, improved offer of C$1.75 wasn’t so cheeky after all.
Related links:

Total raises hostile bid for UTS Energy (FT, 13/04/09)
Total, the peak oil believer’s favourite IOC (FT Energy Source, 16/04/09)

Sheila McNulty

Last year, as the Big Oils were reporting big profits, refiners were struggling with high feedstock prices and dropping demand for their end products at the pump.

How times have changed: oil company profits are down while earnings at Valero, the US’ biggest refiner, have risen sharply.

Kate Mackenzie

About two, judging from this NPR guide:

The interactive presentation has a lot more.

Related links:

Scope of clean energy, climate bills begin to take shape (CNet)

Fiona Harvey

Here is the full text of Al Gore’s statement on the US climate bill, which some in Washington have been portraying as a re-match of the battles of the Clinton administration in the 1990s in which Gore was pitched against Newt Gingrich, then speaker of the House.

Mr Gingrich strongly opposes the climate bill. He has called it “a big energy tax” and said it did not contain policies to to “spur innovation and utilize the creativity of America’s scientists and engineers”.

Kate Mackenzie

On Energy Source:

BP profits down, production rises Pre-tax profits fall 62% but at high end of forecasts

Mexican quake, swine flu: Pemex is fine (sort of) The Mexican oil producer has bigger problems

EIA/API inventory arbitrage: Probably not worth it The difference between the two weekly crude figures ranges too widely

Good, but not good enough Renewables in the UK Budget
Elsewhere:

Iraq: Iraq oil: black gold or black hole? Why Iraq has failed to rise to the occasion and  increase its oil production (The Oil Drum)

Renewables: FERC chairman channels… Greenpeace? The new US Federal Energy Resource Commission chairman has drawn comparisons to the new head of Greenpeace in the US after both saying new nuclear or coal plants may ever need to be built again (TNR, NY Times)

Coal: 60 minutes coal reporting misses the point The programme was too simplistic about clean coal (Huffington Post)

Sudan: OVL quits Sudan block, writes off $90m ONGC’s overseas invesment arm quits after tussle between regional and and federal Sudanese governments (National Times)

Power: Smart meter, dumb idea? The costs and challenges (WSJ)

Fiona Harvey

Renewable energy companies have been digesting the contents of the UK’s Budget since it was delivered last Wednesday. While many are pleased that there is new funding available for the likes of offshore wind, microgeneration, energy efficiency and new low-carbon businesses, there are some concerns.

Kate Mackenzie

Oil inventory data has been one focus of oil price moves recently – along with financial crisis-related demand concerns and the US dollar, among others. According to the latest weekly EIA estimates published on Wednesday, inventories have built for the past seven weeks and last week reached an 18-year high of 370.6m. But American Petroleum Institute estimates, which are published every Tuesday, showed inventories fell by just over 1m barrels.

Until earlier this year, both organisations published their reports on the same day of the week. Today’s Schork Report speculates that the EIA statistics, coming from a government rather than an industry body, are taken more seriously, and some traders are trying to profit from the one day gap between the API and EIA figures.

Kate Mackenzie

Falling oil prices have caused BP’s pre-tax first quarter profits to fall by 62 per cent, after adjusting for the effect of changing prices on inventories.

Costs in exploration and production were down 11 per cent, so the company is already driving deflation into its costs as Tony Hayward, chief executive, proclaimed earlier in the year.

Production levels for the first three months of 2009 were 4.02m barrels of oil equivalent per day – 2 per cent higher than BP’s production levels last year, and higher than that produced last year by ExxonMobil, the world’s biggest oil company by market capitalisation, which produced 3.92m b/d

Read more:

Falling oil price hits BP profits (FT, 28/04/09)
BP first quarter results (PDF) (BP, 28/04/09)

Kate Mackenzie

Mexico’s state oil company is fine, in case you were wondering (and judging by the oil price, quite a few people are). Pemex is so far not affected by either the earthquake or the swine flu outbreak, company spokesmen have said.

“We haven’t seen any damage yet,” a spokesman told Dow Jones (via Rigzone), adding that the company is still checking for earthquake damage and it is premature to rule out any incidents. The epicentre of the quake, which was 6.0 in magnitude, was in Guerrero, a state that does not produce oil.

- US pledges to make up for lost time in climate-change fight
Meeting with China and India to lay groundwork for UN deal (Reuters)

- Obama lays out $400m programme for cutting-edge energy research
Energy secretary to oversee Advanced Research Projects Agency-Energy (Platts)

- Analysis: Nuclear frisson in Europe’s energy sector
Fallout from Siemens’ and Areva’s split highlights problems with cross-border ventures (FT)

- Carbon trading volumes jump 37% in first quarter but fall in value
Companies selling carbon permits to raise short-term cash (FT)

- PetroChina first-quarter profit falls 35% after plunge in crude-oil prices
Chinese oil company says it faces “huge difficulties” in 2009 (Bloomberg)

- Abu Dhabi’s International Petroleum Investment Company gets credit rating for first time
State investment vehicle likely to become more active in capital markets

- Former head of $370bn Norwegian oil fund set to join RiskMetrics
Knut Kjaer to join in newly created position of president (FT)

- Opinion: Electric car subsidies do not serve green goals
Richard Pike questions if there are more cost-effective ways (FT)

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