KIERON McFADYEN: Bad boy made good

KIERON McFADYEN: Bad boy made good

Feb 2nd, 2015 

by John Donovan. 

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By John Donovan

A number of people have contacted me about an article by Andrew Kellock published by the Aberdeen Press & Journal a few days ago under the headline:

Oil boss buys luxury mansion for bargain £1.85million (£1.65m LESS than the asking price!)

The “oil boss” is Kieron McFadyen, Royal Dutch Shell Plc executive vice-president of health, safety and the environment.

The “bad boy made good” phrase comes from an article published about him in September 2006, when Mr McFadyen admitted that at the time he left school, he was a complete waster.

From the comments I have received in the last few days, it is fair to say that he has his fans and his detractors. (For comments about Mr McFadyen see foot of article)

I suspect we are all united in our jealousy at the magnificent house he has purchased.

Seems like Kieron has the grand country mansion befitting a true oil baron, but not yet the CEO job title to go with it. 

In the 1970’s I almost bought Ridgemont House in Torquay with two acres of wonderful gardens overlooking Tor Bay. I did not do so because my late mother felt uneasy about the property. The fact that it was near a cliff edge may have had a bearing. Most of the house and its gardens have subsequently fallen into the sea far below.

COMMENTS ABOUT KIERON McFADYEN

John

If you are conducting a poll, you can add my name to those who have worked with Kieron, and always found him to be a decent, hardworking and competent engineer. I haven’t seen him in a while, but he’s definitely one of the better people in Shell. My only complaint from the time we worked together was that it was always difficult to get him to leave the office and go for a beer – he almost always started early, worked late, and then went straight home to his family…

If he hasn’t made it to the top it is perhaps only because he doesn’t have the psychopathic qualities of those who would follow the Reverend Phil…

All I can say with respect to the article is that Kieron has put his working life into Shell, and at least he now has something worthwhile to show for it. Good luck to him!

ENDS

John

Interesting article on last Fridays Aberdeen Press and Journal.

Kieron MacFadyen was one of Malcolm Brinded’s front men in the cover up of the Brent B fatalities scandal.

Looks like he has done very well out of being a “yes man” in protecting his master!

I wonder if such people have a conscience?

ENDS

John

Kieron worked for me many moons ago and it was clear early on he had exceptional qualities. Realising from the background he came from he was very protective of his family and has ensured his children did not make the same mistakes as he.

Very hardworking, good sense of humour and not scared of anyone. He told Phil (yes, the astronaut) to stuff it when offered a nice posting with a promotion but to a bad country. One had to have balls to do this since this was in the days of Phil the bully and not like nowadays of forgive and forget or turn the other cheek…

He always got on very well with the workers at the coalface. Remember, he was a certified welder one day!

I agree with the statement above that he does not have the psychopatic character required to be the head honcho. I always found him someone reliable and who could be trusted.

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Posted in: GoogleNews, John Donovan, Kieron McFadyen, Oil, Royal Dutch Shell Plc,Shell.
Tagged: John Donovan · Kieron McFadyen · Royal Dutch Shell Plc

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Arctic Oil On Life Support

Arctic Oil On Life Support

Feb 2nd, 2015 

by John Donovan. 

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From an OilPrice.comarticle by Nick Cunningham published 1 Feb 2015 under the headline:

“Arctic Oil On LifeSupport”

Oil companies have eyed the Arctic for years. With anestimated 90 billion barrels of oil lying north of the Arctic Circle, the circumpolar north is arguably the last corner of the globe that is still almost entirely unexplored.

As drilling technology advances, conventional oil reserves become harder to find, and climate change contributes to melting sea ice, the Arctic has moved up on the list of priorities in oil company board rooms.

That had companies moving north – Royal Dutch Shell off the coast of Alaska, Statoil in the Norwegian Arctic, and ExxonMobil in conjunction with Russia’s Rosneft in the Russian far north.

But achieving the goals of tapping the extensive oil reserves in the Arctic has been much harder than previously thought. Shell’s mishaps have been well-documented. The Anglo-Dutch company failed to achieve permits on time, had its drill ships run aground, and saw its oil spill containment dome “crushed like a beer can” during testing. That delayed drilling for several consecutive years.

Related: Oil Industry Withdraws From High Cost Areas

However, the first month of 2015 has darkened Arctic dreams even further. Oil companies are scratching their heads trying to figure out how to deal with a collapse in oil prices, now below $50 per barrel. With virtually every upstream company around the world slashing spending, it is the highest-cost and riskiest projects that are getting scrapped first.

In December, Chevron suspended its drilling plans in Canada’s Arctic indefinitely.

That leaves Shell, the company with the spottiest Arctic record. Shell announced $4.16 billion in fourth quarter profits, a decline from the previous quarter, but a decent showing relative to its peers. Nevertheless, the company also announced $15 billion in spending cuts over the next several years. “The macro environment has moved against us,” Shell CEO Ben van Beurden said after releasing the quarterly figures.

Curiously, however, amid all the spending reductions, Shell hopes to once again return the Arctic, after a two-year hiatus. Perhaps that is because of the sunk costs – Shell will spend around $1 billion on its Arctic program whether or not it is drilled because of all the ships and other logistics already under contract. Shell still needs to obtain several permits and clear legal hurdles, but if all goes according to plan, the company could begin drilling this summer.

It is up to Shell then to keep the oil industry’s Arctic dreams alive.

FULL ARTICLE

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Posted in: Alaska, Arctic, Bloomberg, Chevron, Climate Change, Environment, Oil, Oil Prices, Oil Spill, Pollution, Royal Dutch Shell Plc, Shell, Statoil, United States.
Tagged: Alaska · Arctic Ocean · Beaufort Sea · Chevron · Chukchi Sea · Oil · Oil Prices ·Royal Dutch Shell Plc · Shell

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Shell Pays $90M To Escape Calif. Contamination Suit

Shell Pays $90M To Escape Calif. Contamination Suit

Feb 2nd, 2015 

by John Donovan. 

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Shell Pays $90M To Escape Calif. Contamination Suit

By Brandon Lowrey

Law360, Los Angeles (January 30, 2015, 8:50 PM ET) — A California judge on Friday tentatively approved Shell Oil Co.’s $90 million good-faith settlement of personal injury claims brought by nearly 1,500 Los Angeles-area residents allegedly harmed by buried waste oil, leaving intact claims against the developer of their neighborhood, Barclay Hollander Corp., and its current owner, Dole Food Co.

The settlement lets Shell out of the lawsuit brought over the highly publicized contamination of the Carousel housing tract in Carson, about 13 miles south of downtown LA. Shell’s $90 million deal will offset any judgments…

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Posted in: Environment, Litigation, Pollution, Royal Dutch Shell Plc, Toxic contamination, United States.
Tagged: Litigation · Oil · Royal Dutch Shell Plc

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Oil Workers in U.S. Begin First Large-Scale Strike Since 1980

Oil Workers in U.S. Begin First Large-Scale Strike Since 1980

Feb 1st, 2015 

by John Donovan. 

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From an article by Lynn Doan and Barbara Powell published on 1 Feb 2015 by Bloomberg under the headline:

“Oil Workers in U.S. Begin First Large-Scale Strike Since 1980″

Shell activated a “contingency plan”

(Bloomberg) — The United Steelworkers union, which represents employees at more than 200 U.S. oil refineries, terminals, pipelines and chemical plants, began a strike at nine sites on Sunday, the biggest walkout called since 1980.

The USW started the work stoppage after failing to reach agreement on a labor contract that expired Sunday, saying in a statement that it “had no choice.” The union rejected five contract offers made by Royal Dutch Shell Plc on behalf of oil companies since negotiations began on Jan. 21.

The United Steelworkers union hasn’t called a strike nationally since 1980, when a stoppage lasted three months. A full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel production.Shell and union representatives began negotiations amid the biggest collapse in U.S. oil prices since 2008.

“Shell refused to provide us with a counteroffer and left the bargaining table,” USW International President Leo Gerard said in a statement early Sunday. “We had no choice but to give notice of a work stoppage.”

Ray Fisher, a spokesman for The Hague, Netherlands-based Shell, said by e-mail on Saturday that the company remained “committed to resolving our differences with USW at the negotiating table and hope to resume negotiations as early as possible.”

The USW asked employers, which include Exxon Mobil Corp. and Chevron Corp., for “substantial” pay increases, stronger rules to prevent fatigue and measures to keep union workers rather than contract employees on the job, Gary Beevers, the USW international vice president who manages the union’s oil sector, said in an interview in Pittsburgh in October.

Across U.S.

The refineries called on to strike span the U.S., from Tesoro Corp.’s plants in Martinez, California, Carson, California, and Anacortes, Washington, to Marathon Petroleum Corp.’s Catlettsburg complex in Kentucky to three sites in Texas, according to the USW’s statement.

The sites in Texas are Shell’s Deer Park complex, Marathon’s Galveston Bay plant and LyondellBasell Industries NV’s Houston facility, the statement shows. The walkout also includes Marathon’s Houston Green cogeneration plant in Texas and Shell’s Deer Park chemical plant.

More refineries are standing by to join the sites on strike, according to two people familiar with the plan who asked not to be identified because the information isn’t public. The remaining USW-represented sites are operating under rolling, 24-hour contract extensions, the USW said.

Refinery Shares

Shell activated a “contingency plan” to continue operations at the Deer Park refinery, Fisher said on Saturday.

FULL ARTICLE

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Posted in: Bloomberg, Chevron, Exxon Mobil, Oil Prices, Royal Dutch Shell Plc, United States.
Tagged: Chevron · ExxonMobil · Oil · Oil Prices · Royal Dutch Shell Plc

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BIG OIL: Who will blink first to set the M&A scramble in motion

BIG OIL: Who will blink first to set the M&A scramble in motion

Jan 31st, 2015 

by John Donovan. 

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With more than $110 billion of oil and gas assets on the block as companies big and small count the cost of the collapse in oil prices, it is now a question of who will blink first to set the M&A scramble in motion.

Article published by Reuters 30 Jan 2015 under the headline:

Buyers bide their time in $110 bln oil asset sell-off

* Half of the assets on sale are in North America

* North Sea could prove a hard sell

* Potential buyers holding out for further price falls

* Wave of deals expected within three to six months

By Ron Bousso

LONDON, Jan 30 (Reuters) – With more than $110 billion of oil and gas assets on the block as companies big and small count the cost of the collapse in oil prices, it is now a question of who will blink first to set the M&A scramble in motion.

Energy groups with spare cash, venture capital funds and multinational and state oil companies are eyeing assets with valuations that have largely tracked the halving of the oil price to less than $50 a barrel since last June.

But with the exception of a few recent moves, including Repsol’s $3 billion acquisition of Talisman Energy , buyers have largely stayed on the sidelines.

“Deals have just about dried up because you’re catching a falling knife,” said Simon Henry, chief financial officer at Royal Dutch Shell.

Though it hopes to sell assets worth $5 billion to $6 billion this year, Shell is not ruling out purchases of others that will increase its production base, Henry said.

Diverging views on when oil prices will recover leave plenty of potential for disagreement over the value of producing assets.

“If you end up paying at $50 (per barrel) plus a $30 premium and the oil price stays at $40 for three years you look a fool, or vice-versa,” Henry said.

Strength in refining and trading and low debt mean Shell appears more able than some rivals to cover dividends from operating cash flow.

The entire industry is in the midst of spending cuts to ensure shareholders get their pay-outs. Those savings will take time to kick in but, even in the short term, bank borrowing will help avoid hasty sales of assets.

The waiting game will continue for a little while yet, says Rupert Newall, BMO Capital Markets’ co-head of investment banking for Europe, the Middle East and Africa.

“We are going to need another three months of these prices before sellers will become more realistic about the price environment they are selling into today,” Newall said.

DISTRESSED ASSETS

But as companies become “more desperate”, as Shell’s Henry puts it, and the divergence between valuations narrows, mergers and acquisitions are expected to flow.

“That will be driven in large part by financing challenges where there is a lot of debt rollover,” Henry said, adding that such pressure could be most keenly felt with smaller and medium-sized operations in North America but also some of the smaller European companies.

While private equity funds aim to buy distressed assets that they expect to flourish once the oil price stages its eventual recovery and majors look to expand production on the cheap, Asian national oil companies are expected to chase global capacity to secure supplies for their energy-hungry economies.

Potential buyers include Asian state-run companies such as Chinese oil champions CNPC, Sinopec and CNOOC, as well as Indian and Japanese companies.

Based on company filings and announcements compiled by oil and gas consultancy 1Derrick, assets worth about $112 billion dollars are being offered for sale.

Half of these are North American, mostly U.S. oil and gas shale fields such as Anadarko’s Wyoming field and Reliance Industries’ Eagle Ford assets, as well as ConocoPhillips’ oil-sands operations in Canada.

Outside North America, Russian oil giant Rosneft is offering its non-core operations while Apache has mainly Egyptian assets for sale.

A total of 22 asset packages valued at about $16.6 billion were put up for sale in the fourth quarter of 2014, compared with 56 worth $41.1 billion in the previous nine months, says 1Derrick analyst Mangesh Hirve.

NORTH SEA PROFIT SQUEEZE

Similarly to Shell, BP is another oil major that has said it would consider acquisitions even as it sheds operations in higher-risk, higher-cost regions such as Nigeria and Iraq.

“The area where we believe there is going to be less interest is in the North Sea, which is a mature, high-costs oil province,” HSBC said.

Top players in the North Sea, including Total, BG Group and ConocoPhillips, are all trying to sell assets in the region, 1Derrick says, and the chief executive of French group Total said at the World Economic Forum last week that the company would be investing less in mature fields to focus on assets with potential for higher returns.

A host of small operators could also try to sell North Sea assets as profit margins are increasingly squeezed.

“In the North Sea, we have a proliferation of relatively small companies; very few move the needle for fund managers,” said Jon Fitzpatrick, head of Macquarie Capital’s oil and gas team.

With so much on offer around the world, it looks unlikely that investors such as Carlyle International Energy Partners will jump the gun.

As its managing director Marcel Van Poecke said this month: “After a crash like this, there is clearly more upside than downside. This will be a great time to invest, but there is no need to rush into it.”

(Additional reporting by Dmitry Zhdannikov; editing by David Goodman)

SOURCE

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Posted in: BP, Chevron, Conoco Phillips, Exxon Mobil, Oil Company Profits, Oil Prices,Reuters, Royal Dutch Shell Plc, Shell, Simon Henry, Total.
Tagged: BP · Chevron · ConocoPhillips · ExxonMobil · Gas · Oil · Oil Prices · Royal Dutch Shell Plc · Total

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