Marvin Odum speaks out
Article by M. Nadeem published 27 June 2014 by insider monkey.com under the headline: “Royal Dutch Shell plc’s Subsidiary Shell Oil Company President Marvin Odum Discusses Energy Industry State”
In a Fox News’ Opening Bell program on June 27, Shell Oil Company’s, a subsidiary of Royal Dutch Shell plc), President, Marvin Odum, talked about the current energy industry situation. Mr. Odum said that they are worried about raising oil prices, but, at the same time, they also understand that geopolitical events and other dynamics across the industry.
Talking about oil supply, Mr. Odum stated that there is no production impact as a result of what is going on in Iraq, and hopefully it will never happen. He also noted that “energy demand is doing nothing but increasing. And that’s even with tremendous efforts around efficiency, alternative fuels and everything else.”
“We are operating in 40 countries. [...] And a company like Shell Oil Company what we have to think about, particularly given the current geopolitical dynamics, we have to have a diversified portfolio,” Mr. Odum said.
Mr. Odum added that the subsidiary of Royal Dutch Shell plc he leads expects growth in all sectors. However, he said, natural gas will be the primary focus of Shell Oil Company. “Natural gas is a critically important story,” he said.
Natural gas is a cleaner source of energy and now there is technology to move gas around the world. It is cleaner fuel and less emitter, he said. At the same time, the CEO of Shell Oil considers that the United States has a big potential of becoming an oil and natural gas exporter.
”I think it’s going to start happening. We are starting to see that permit system has moved a bit, and we see a lot of energy project getting built right now.”
North America’s gas market is the one very large market, Mr. Odum said, adding that projects are being built on Gulf Coast of U.S., and also there are projects on West Coast of Georgia, and also on West Coast of Canada. “We can see start of export from that area,” Mr. Odum added.
Shale’s junk debt could get shaky if Fed raises rates
Extracts from a Houston Chronicle article by Collin Eaton published 27 June 2014
(Good article. Not Shell specific, but a generic problem to which Shell is heavily exposed)
Two years after natural gas prices collapsed, Chesapeake Energy’s $12 billion in corporate debt last month nearly made it out of junk territory.
The natural gas producer has sold off thousands of acres, curbed billions in spending, cut a tenth of its workforce and banished its chief executive in the effort to trim a debt-laden balance sheet.
A credit upgrade in May signaled progress, but hardly an end to an episode that has highlighted the dangers of the U.S. shale industry’s addiction to risky debt.
Corporate bond investors, eager to buy high-yield bonds from U.S. independent oil and gas producers, have tripled the sector’s junk-rated debt (formally called speculative-grade) to $788 billion since the shale energy surge began seven years ago. But next year, the Federal Reserve may tap the brakes.
St. Louis Fed President James Bullard sent a jolt through equity markets Thursday when he speculated the nation’s economy could be ready for higher interest rates by the first quarter of next year.
But the gatekeeper of the nation’s money supply already has signaled it is planning to end its multibillion-dollar bond-buying program by the end of the year, and then begin to raise short-term interest rates toward historically typical levels from the near-zero rates that helped jump-start the recovery.
Higher interest rates might make risky new bond issues by shale producers less attractive, and a flight of investor capital could leave the producers short on a commodity even more precious than oil: Cash.
In addition to international conflicts, activist shareholders’ push for major oil companies, including Exxon Mobil, Royal Dutch Shell and Total, to exercise a new capital restraint probably will push oil prices up as production falls, Barclays analyst James West wrote in a report earlier this month. The industry saw a similar climb in crude prices in 2004 and 2005 after the majors pulled back spending.
Spot the Rooney in your portfolio
Extracts from a Motley Fool article by Harvey Jones published by The Yorkshire Post on 28 June 2014 under the headline: “Motley Fool: Spot the Rooney in your portfolio
Tesco isn’t the only stock displaying Rooney-esque tendencies. Anglo-Dutch oil major Royal Dutch Shell has also been off the pace.
First quarter earnings of $4.5bn were sharply down from $8bn one year earlier.
Broker UBS recently complained the stock was losing “near-term momentum”, just as Rooney did as he approached the penalty box against Italy…
Shell once looked like a world beater.
Lately, it has been scaling back its ambitions, pulling out of shale gas, selling its stake in the Brazilian deepwater project BC-10, and turning down major projects in Australia and Louisiana.
Instead of rampaging up and down the line, it prefers to play the safe, square ball.
BP and Shell keep a watchful eye on events in Iraq
Extracts from a This Is Money/Daily Mail article by Rob Reed published 27 June 2014 under the headline: “BP and Shell keep a watchful eye on events in Iraq as violence continues to escalate in the region”
The upward pressure on oil prices since terror group ISIS began its horrific offensive has been echoed by even bigger movements in the share price of firms with an Iraqi presence. The two British supermajors with a foot in Iraq are BP and Shell, the former operating the vast Rumaila field and the latter developing sister prospect Majnoon. Both have removed non-essential staff but say their operations, in the to-date peaceful oil-rich south of the country, have been unaffected. If Baghdad were to be overrun, that would be a different matter, but oil industry types are quietly hopeful that it won’t come to that.
The TRUTH will set you FREE.
