On FT Energy Source:
- BP’s unsurprising refining surprise
- Being rich in resources really is a curse
- Renewables race: Winner China!
- Will the US soon be exporting nat gas?
- A long wait for Opec Iraq quotas
- Occidental in a position to buy
- Why the Obama’s energy budget is short-sighted
- Exxon profits and Shell’s Brazilian ethanol plans in Energy headlines
(Further reading will return tomorrow)
As one scours the landscape for potential mergers and acquisitions in the oil and gas patch, Occidental Petroleum might be a good starting point. After a strong 2009, the California-based producer is planning to increase its capital expenditures 19 per cent from the $3.6bn spent in 2009, to about $4.3bn.
Certainly that will not lend itself to any deals of the size ExxonMobil just pulled off. But there are numerous small fields and companies up for sale after a difficult 2009, given low commodity prices and a slowdown in demand amid the economic downturn. And Occidental has a history of picking up these little acquisitions.
Ghana is worried, not to mention Papua New Guinea and most likely, Uganda. Poor countries that have recently found themselves the owners of sizeable fossil fuel reserves all fear the “resource curse”, or “paradox of plenty” – that, like Nigeria, Angola, Congo and many others before them, the oil wealth will somehow translate into corruption, poverty and/or civil oppression instead of higher standards of 1living.
Francesco Caselli and Guy Michaels at VoxEU have attempted to work out whether the resource curse exists, by looking at comparing Brazilian municipalities that have received different levels of oil revenues.
The results were hardly reassuring for citizens of countries with newfound resources wealth.
By Izabella Kaminska
That, for the record, is what happens when analysts don’t mysteriously “mind-meld” a couple of weeks ahead of your results.
As we reported on January 13, a number of analysts spookily cut their earnings forecasts on rival Shell — all at the same time. The revisions were related to weaker than expected refining margins in the quarter.
BP’s fourth quarter numbers, meanwhile, missed expectations on — you’ve guessed it — a weaker than expected performance in refining. Or as BP put it:
Compared with a year ago the result for the fourth quarter reflected a continued weaker overall Refining and Marketing environment, including a refining indicator margin of $1.49 per barrel compared with $5.20 per barrel in the fourth quarter of 2008. BP’s actual refining margin declined even more than the indicator margin during this period. In addition, rising crude prices and reduced volatility compressed marketing margins and led to a weaker supply and trading contribution. These factors were somewhat offset by stronger operational performance and lower costs.
Crucially, BP also added:
Looking forward, in 2010 we expect refining margins to remain weak.
Not that this refining issue couldn’t be foreseen back in January, or for that matter the third or second quarter of last year.
Independent refiner downgrades imminent? - FT Alphaville
Petroplus, still praying for a distillate recovery – FT Alphaville
Distillate hangover – FT Alphaville
Independent refiner downgrades imminent? – FT Alphaville