MarketLine Blog

Posts about Oil & Gas

OPEC: Supply restriction amid global oil glut

MarketLine

OPEC, consisting of 13 oil-rich governments, is the only true cartel allowed, albeit grudgingly, to operate in today’s global economy and it wields considerable power. In 1973 Arab members imposed an oil embargo on the US during the Arab-Israeli war which tripled prices in a matter of months. Three times in recent history OPEC has stepped in to shore up the oil market, and each time prices rallied within days of action being taken. It is fair to say, therefore, that OPEC is a force to be reckoned with. Or… Read more

Brexit – the meaning of a messy divorce for the Euro area.

MarketLine

The lending channel between many industries and banks in the Euro area has been far from normal since 2008. This factor puts Britain in a better position to negotiate Brexit next year. The Euro area will embark on a period of further unprecedented slowdown by detaching itself from the world’s fourth largest economy. Credit to industries coming from the banking sector is key for the region to grow as the single currency area has a bank-based model as opposed to a capital market model. Debt financing to companies is largely… Read more

Donald Trump: Incoming president likely to create bigger mess than his hair

MarketLine

Donald Trump’s policy detail is rather thin, but based on multiple and contradictory things he has said on the campaign trail, shrinking of the state via both reduced tax income and federal spending while promising to build a border wall and renovate infrastructure, protectionist stances on international trade agreements while promising a Brexit Britain a comprehensive deal, an expansion of dirty industries at the expense of environmental regulation, and undermined central bank independence. Donald Trump’s election to the Oval Office was considered one of the most divisive and bitter elections… Read more

Fracking approval: In spite of public opinion

MarketLine

The decision to approve Third Energy’s application to begin exploratory drilling for shale gas outside of Kirby Misperton in North Yorkshire has been hailed as a landmark decision for the UK fracking industry. Many believe that it will open the door to a swathe of further approvals, while setting a precedent which could help rival firm Cuadrilla in their appeal against the decision not to allow them to frack up on the Fylde coast. However, industry chiefs would do well to keep their champagne on ice, as public opposition is… Read more

Shell to Acquire BG

MarketLine

Royal Dutch Shell is to buy BG Group in one of the largest energy company acquisitions seen in a decade. The deal is worth £47 billion ($77 billion), representing a 50% premium on BG’s share price as of 7 April 2015, and the combined entity will be the largest company in the FTSE 100. Shell is a vertically-integrated company, whose operations range from exploration and production of oil and natural gas, refining, petrochemical production, and marketing of fuels and other products. BG Group is more focused on upstream activities. In… Read more

The US is poised to become a net exporter of fracked gas in 2015

MarketLine

The US has now moved to a position where it can export fracked natural gas. Cheniere Energy, a company which initially spent $2bn building a natural gas import terminal is now building an export terminal, expected to be finished this year, allowing it to sell liquefied natural gas to other countries. The company’s Sabine Pass facility got the first approval from the Department of Energy to export to any country in the world. CEO Charif Souki said, “It’s a revolutionary thing, absolutely astonishing, that America will be an exporter of… Read more

BP expected to announce job cuts on its North Sea oil rigs, despite new field development

MarketLine

BP is expected to announce job cuts on the UK North Sea Oil rigs that it operates, despite having completed development of new wells only in December last year in the Kinnoull reservoir. The company controls the most important infrastructure in the North Sea oil fields and coupled with the recent downsizing of other operators in the area, such as Shell and Chevron, this move does not bode well for the future of North Sea oil and more broadly tight oil sources in general. BP recently completed a major development… Read more

Epic Shale: Investor exodus from Poland leaves wider questions for fracking

MarketLine

One of Europe’s largest shale gas markets by drilled wells has seen many companies wind up their exploratory operations, leaving Poland’s shale gas ambitions floundering. The companies cite a mix of bureaucratic entanglement and difficult geology as their reasons for exiting the market, with only state owned enterprises (such as PKN Orlen, Lotos and PGNiG) and a few well-funded global companies left prospecting. It is a far cry from former foreign minister Radek Sikorski’s vision of Poland becoming a “second Norway” in 2010. Emboldened by the US’s shale boom and… Read more

Fracking in the UK- Some political players rally behind the technology

MarketLine

The hydraulic fracturing (fracking) process has allowed the use of horizontal drilling in shale rock to open up new gas reserves previously presumed to be technically unrecoverable. The process involves blasting fracking fluid into the drill well which splits the shale into fissures. The process requires a large amount of water, sand, and chemicals. Both shale and coal methane beds have become accessible through this technique. Whilst countries such as the USA, Australia and Poland have been pushing ahead with the technology, the UK has been slow and careful in… Read more

Oil & Gas Industry Analysis: 2013 is expected to be a hard year for oil & gas segment due to lower consumption.

MarketLine

While the oil segment is operated on a global scale, the natural gas segment tends to be more localized, due to high transport costs and the need to ensure adequate transport infrastructure. In its January report, the Organization of the Petroleum Exporting Countries (OPEC) reports that in 2012, the increase in production in OPEC countries was just 0.54 million barrels per day, as a result of record deceleration in the Middle East and Africa. However, in North America, the increase stood at more than one million barrels per day. The… Read more

Ukraine reduces reliance on the Russian gas and imports more from Europe

MarketLine

Ukrainian state energy company, Naftogaz, has reduced gas imports from Russia by 30% so far in 2013 and will cut them further in 2014. At the same time imports from Europe will double, according to Ukraine’s Energy Minister Eduard Stavytsky. Imports from Europe are expected to reach 2-2.5 billion cubic meters this year, and no less than 5 billion cubic meters in 2014. The reason behind this move is the high price of Russian gas. While the sample average price of gas supplied from Europe by German firm RWE (RWEG.DE)… Read more

Impacts of Deepwater Horizon Oil Spill on BP Plc.

MarketLine

The Deepwater Horizon Oil spill took place in the Gulf of Mexico in 2010. The spill emanated from a seafloor oil gusher caused by an explosion of the Deepwater Horizon semi-submersible Mobile Offshore Drilling Unit, which was owned and operated by US company Transocean. Transocean was drilling for BP in the Macondo Prospect oil field about 40 miles (60km) southeast of the Louisiana coast. The explosion took place on 20th April 2010 and resulted in the Deepwater Horizon oilrig sinking two days later. An average of over 50,000 barrels of… Read more