Financial Review - Energy Information Administration
Primarily as a result of higher oil prices, the 87 companies analyzed suffered Net losses from hedging derivatives were $11 billion in 3Q21, totaling almost $30 billion in the first three quarters of 2021.
EIA Financial Review: Third-Quarter 2021
Release date: December 29, 2021 Next release date: March 2022
Key findings
Brent crude oil daily average prices were 69% higher in 3Q21 than in 3Q20 and averaged $73 per barrel.
In this study of 87 companies, the combined petroleum liquids production level increased 1% in 3Q21 from 3Q20, and natural gas production increased 4% during the same period.
Cash from operations in 3Q21 totaled $157 billion, the highest for any quarter in the 2017–21 period, primarily as a result of higher oil prices.
Net losses from hedging derivatives were $11 billion in 3Q21, totaling almost $30 billion in the first three quarters of 2021.
Europe is not storing enough gas to get it through a cold winter, leading Trafigura chief to warn of rolling power outages in Europe this winter.
As for Oil, "We are not seeing the replacement of reserves. Oil has gone from a 15-year reserve life to a 10-year reserve life in a short period of time," he said.
See the full article on the Financial Times here: https://on.ft.com/3HCuemX
Slow wind speeds are one of the factors responsible for surging natural gas prices. This has revived nervousness over renewables encapsulated in the old question "how will we keep the lights on when the wind doesn't blow and the sun won't shine?"
See the whole article on the Financial Times here:
Nigeria finally enacted a long-delayed law cutting taxes levied on energy companies to more globally competitive levels, in its push to increase Oil production more than 2X by 2025 (!).
Something that is quite doubtful that it could be achieved: To almost triple production in just over three years!?!
Production royalties will now range from 5% to 15%, depending on where fields are located, down from the previous range of 7.5% to 20%.
Nigeria currently pumps about 1.5 million barrels of oil a day. That's down from a peak of 2.5 million in 2005.
The decline is attributed to a lack of investment in new wells, oil theft and its adherence to quotas set by OPEC.
The country attracted just 4% of the $70 billion committed to Africa's oil and gas sector from 2015 to 2019, partly due to uncertainty over its regulatory environment, according to accounting firm KPMG.
President Muhammadu Buhari's administration is banking on an influx of capital to boost production to 4 million barrels a day by 2025. Any such increase could cause heat with other members of OPEC+, which limits supply to keep prices up. —And is quite doubtful it could be achieved in just over three years!?!
Far below the $135 million PDVSA paid for the minority stake in Refidomsa in 2010 as part of former Venezuelan President Chavez' efforts at boosting the OPEC member's influence in the Caribbean through petrodiplomacy.
The new oil tax system announced by three Chinese government agencies on 14 May slaps a levy equivalent to nearly $30/bl on "diluted bitumen", the category through which Venezuelan crude is imported into China. Because Venezuelan crude is already subject to steep discounts reflecting sanctions risks and quality issues, the tax would wipe out a chunk of the sales margin for Venezuelan state-owned PdV and the intermediaries through which it operates. Even if Merey or look-alike grades such as Singma were rebranded as crude to avoid the new tax, the crude import quotas to which independent refiners are subject limits their ability to buy it.
- JPMorgan Chase & Co. 10 Year Goal includes $1 trillion for "green solutions" - In 2020, JPMorgan facilitated $220 billion of financing to drive action on climate change and sustainable development, including more than $55 billion toward green initiatives - Citigroup Inc. said it would back $1 trillion of similar efforts by 2030.
JPMorgan, Citi Pledge Trillions Toward Climate, Sustainability
U.S. banks boost efforts to fight climate change amid pressure
JPMorgan Chase & Co. set a goal to finance $2.5 trillion in initiatives that combat climate change and advance sustainable development over the next 10 years, while Citigroup Inc. said it would back $1 trillion of similar efforts by 2030.
Combined with previous announcements by Bank of America Corp., the three largest U.S. lenders have all committed to backing more projects that advance a low-carbon economy amid calls by the White House for businesses to do more to curb pollution.
JPMorgan's commitment includes $1 trillion for projects that bolster cleaner energy sources, it said Thursday in a statement. The bank will also support developing countries as well as initiatives that advance economic inclusion. Citigroup said half its pledge will go toward environmental projects, including renewable energy, water conservation and sustainable agriculture. Much of the rest is aimed at education, affordable housing, gender equality and racial and ethnic diversity.
Eliminating emissions has become a major talking point for bank executives this year as the finance industry attracted greater scrutiny for funding the world's biggest emitters. Goldman Sachs Group Inc., Citigroup and Bank of America have all set net-zero greenhouse-gas emissions targets in their financing activities.
"Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities," Jamie Dimon, JPMorgan's chief executive officer, said in the statement.
Still, JPMorgan remains the biggest funder of fossil-fuel companies globally, financing about $189 billion since the 2015 Paris climate agreement, according to data compiled by Bloomberg. Dimon wrote in his annual shareholder letter last week that "the solution is not as simple as walking away from fossil fuels."
JPMorgan said its commitment will also enable it to provide clients in the corporate and investment bank and commercial-banking businesses with centralized access to sustainability-focused financing, research and advisory s
Low-Carbon Transition
"It is important to set expectations around where we want to see our clients' emissions head over the next 10 years, but it's also really important that we support them in their low-carbon transition," Marisa Buchanan, JPMorgan's global head of sustainability, said in an interview. "That means coming to the table with capital."
In 2020, JPMorgan facilitated $220 billion of financing to drive action on climate change and sustainable development, including more than $55 billion toward green initiatives, according to the statement.
Promises of more autonomy to tap the world’s biggest crude reserves are drawing the oil industry to meetings with the Nicolas Maduro regime.
Whether Maduro will succeed in luring some investment is still unclear. But one thing is certain: Oil companies have never had such leverage with him to negotiate a piece of the country’s more than 300 billion barrels of crude
Maduro’s government says his new energy law alone will allow oil companies to get back in business as they assume control of Venezuelan assets. That’s because the U.S. only bans doing business with PDVSA, the regime and those who help it. Oil ventures run by independent oil companies, in theory, wouldn’t be barred from developing crude reserves in the country.
Major oil companies would probably wait for sanctions to be lifted regardless, but others could jump in as soon as they can claim they’re operating independently from PDVSA and Maduro’s regime, and therefore not subject to sanctions
At a Hotel in Caracas, Oil Executives Weigh a Return to Venezuela
19 March 2021, 12:00 CET Updated on 19 March 2021, 17:03 CETA
Inside a chic lounge, oil lobbyists and executives rub shoulders as Spanish, French and Italian can be heard in the halls. This isn’t the ZaZa boutique hotel in Houston, where global energy top brass like to stay. It’s the Cayena Hotel in the Venezuelan capital of Caracas.
Drawn by promises of privatization and more autonomy to tap the world’s biggest crude reserves, they’re meeting with the Nicolas Maduro regime and state-owned Petroleos de Venezuela SA to best position themselves when doing business there is possible again. Bigger producers like Chevron Corp., France’s Total SE and Italy’s Eni SpA would probably wait until U.S. sanctions are lifted, but smaller players might get started whenever new rules opening up the industry for private enterprise take effect.
“I want to tell investors from the U.S. and around the world that Venezuela’s doors are open for oil investment,” Maduro said in a recent televised address.
The Cayena Hotel in the La Castellana neighborhood of Caracas.Photographer: Carolina Cabral Fernandez/Bloomberg
It’s a make-or-break moment for an impoverished nation that’s running out of fuel to haul food and cash to pay for imports of basic necessities. Whether Maduro will succeed in luring some investment is still unclear. But one thing is certain: Oil companies have never had such leverage with him to negotiate a piece of the country’s more than 300 billion barrels of crude.
“There is some easy potential to increase production if sanctions enforcement declines,” said Francisco Monaldi, a Venezuelan-American lecturer in energy economics at Rice University’s Baker Institute for Public Policy, and an expert on Venezuela’s oil industry. “After that, you need significant investments.”
The successor of the late Hugo Chavez, who infamously seized assets from Exxon Mobil Corp. and ConocoPhillips, is promising to pass a law that will officially end an oil monopoly in the hands of PDVSA, as the country’s ruined oil cash cow is known.
Executives representing oil companies are holding meetings to discuss what the terms would be under the new legislation, according to people with knowledge of the talks, who asked not to be named because they’re not authorized to comment on them in public.
Chevron, for one, is even getting in touch with contractors to assess how fast they could help the San Ramon, California-based company restart operations in the South American nation, one person said.
“Chevron will continue to comply with applicable laws and regulations in relation to the activities that it is authorized to undertake in Venezuela,” a spokesperson for the company said. “We remain committed to the integrity of our joint venture assets, the safety and wellbeing of our employees and their families, and the company’s social and humanitarian programs during these challenging times.”
Total didn’t return requests for comment, as didn’t Maduro’s Information Ministry, the Oil Ministry and PDVSA. Eni said none of its executives visited Caracas.
Maduro’s government says his new energy law alone will allow oil companies to get back in business as they assume control of Venezuelan assets. That’s because the U.S. only bans doing business with PDVSA, the regime and those who help it. Oil ventures run by independent oil companies, in theory, wouldn’t be barred from developing crude reserves in the country.
A cyclist rides past a mural of oil pump jacks on the Boulevard de Sabana Grande in Caracas.Photographer: Carlos Becerra/Bloomberg
Major oil companies would probably wait for sanctions to be lifted regardless, but others could jump in as soon as they can claim they’re operating independently from PDVSA and Maduro’s regime, and therefore not subject to sanctions.
There are people close to the government “eager to get some oil fields; I would expect there to be some privatizations,” Monaldi said. “They will try to invest in the wells that are the easiest to connect.”
Wilmer Ruperti, a Venezuelan-born shipping magnate, is among less-known entrepreneurs who have sought to do business with PDVSA in the past despite sanctions. Ruperti didn’t reply to requests for comment on potential investments under the proposed new rules.
Restoring Venezuela’s oil industry back to its former glory would likely take tens of billions of dollars, and that might never happen, but any business activity would help the country.
Once a prosperous OPEC-founding member that produced more than 3 million barrels a day of crude, the nation is now pumping less than half a million.
Oil Minister Tareck El Aissami recently vowed to boost production to 1.5 million this year, and that would be difficult to achieve without help. Monaldi estimates more than $100 billion and a decade of work would be required to get output past 2 million barrels a day.
“This means you need a ton of private investment,” he said.
An increase in oil output would not only buoy the economy but also raise capital to ultimately pay off creditors holding roughly $60 billion of defaulted obligations.
So, executives from the oil industry and capital markets have also been pleading their case to officials in Washington, people familiar with those discussions said. Their message: If others are going to play ball, let’s get in on the action, too.
“The big question is if the oil companies have enough political clout for an easing in sanctions,” said Raul Gallegos, a Bogota-based director at Control Risks, an international consulting firm. “They are interested in the flexibility that Maduro is offering.”
The U.S. Treasury’s Office of Foreign Assets Control, which enforces the sanctions, didn’t immediately reply to requests for comment.
With bigger issues to tackle, from the coronavirus to tension with Russia and trade with China, U.S. President Joe Biden’s administration hasn’t yet made a significant pivot from President Donald Trump’s strategy on Venezuela. The U.S. government officially recognizes opposition leader Juan Guaido as Venezuela’s interim president until there’s a free and fair election.
If the new U.S. government at least moves to let companies resume swaps of diesel for Venezuelan crude, that would help the country avert collapse. The fuel is needed for trucks to take imported food, medicines and other products from ports to cities, as well as to haul goods from farms and factories.
``The onus is on the U.S. to decide if sanctions make sense going forward,'' Gallegos said.
Without investments in the country’s crumbling energy infrastructure, though, that would be just a stopgap solution.
— With assistance by Peter Millard, Patricia Laya, Francois De Beaupuy, and Kevin Crowley
(Adds comment from analyst in penultimate paragraph.)
What Countries Will Fight Over When Green Energy Dominates - Bloomberg
You need a new geopolitical model, you cannot simply put renewables into the old coal and oil model.
A soldier atop a humvee scans the horizon in Kuwait, dotted with oil well fires set by retreating Iraqi military forces, during the Gulf War. In a world dominated by green energy, security researchers predict, a latter-day Saddam Hussein would have little reason to invade Kuwait to seize its solar parks, as he did in 1990 for its oil wells.
Photographer: Allan Tannenbaum/The LIFE Images Collection
What Countries Will Fight Over When Green Energy Dominates
In what seems to be a question of when, not if, the global economy will shift away from fossil fuels and towards a future powered by Green Energy, researchers, corporations and governments are gaming out what that means for international geopolitics.
The Rand Corporation's been designing war games with the Pentagon since the 1950s, modelling such hard-nosed security scenarios as a two-front U.S. war with China and Russia. Now the think tank is turning its realpolitik tool kit to a question more often associated with environmental dreamers: How will clean energy change the world?
Rand is among the small but growing number of research organizations, universities and at least one European government that have started gaming out the gritty geopolitical implications of a globe dominated by green energy. It's the latest sign that the once quaint idea of renewable energy displacing fossil fuels has gone mainstream.
Last year was a turning point. China, the world's biggest polluter, finally joined the cascade of nations and companies setting target dates for carbon neutrality. The European Union for the first time generated more electricity from carbon-free sources than polluting ones. Joe Biden won the U.S. presidency, bringing an ambitious climate agenda to the White House.
Yamani served as Saudi Arabia's Oil Minister from 1962 until 1986, when he was dismissed by Saudi King Fahd over differing opinions on the Kingdom's oil policies.
When Yamani began his role as oil minister in 1962, the United States was the leading oil producer, with Saudi Arabia producing less than 2 million barrels per day. And Exxon and Chevron had control of most of the oil in Saudi Arabia. But that quickly changed as Saudi Arabia moved to nationalize its oil industry. Saudi Arabia's oil production quickly reached 10 million bpd during Yamani's tenure.
• Deal could value renewable assets at up to 500 million euros
• Dealincludes more than 400 megawatts of operational plants
• State-owned Chinese firm continues acquisition drive in Europe after buying X-Elio Spanish solar assets in 2020
Three Gorges to Buy Billionaires' Spanish Renewable Portfolio
Bloomberg News
State-owned Chinese firm continues acquisition drive in Europe
Deal includes more than 400 megawatts of operational plants
China Three Gorges Corp. agreed to buy Spanish renewable assets from a group of billionaires, as the Chinese energy giant seeks to double down on the southern European country.
State-owned Three Gorges will acquire 100% of a portfolio of more than 400 megawatts of operational plants from a consortium led by Corporacion Masaveu, backed by the wealthy Spanish family of the same name, it said in an emailed statement received Monday. The assets include 11 wind farms and one solar plant, according to the statement.
Bloomberg News reported earlier this month that the Chinese company was in advanced talks to buy the assets. Other sellers include Korys Group, the investment arm of Belgium's billionaire Colruyt family, as well as Exus Management Partners and a group of Portuguese minority investors, the statement shows. The deal is expected to be completed before the end of the second quarter.
Three Gorges had been discussing a valuation of about 400 million euros ($486 million) to 500 million euros for the portfolio, people with knowledge of the matter have said. The Chinese group worked with FTI Capital Advisors on the deal.
The investment follows Three Gorges's purchase last year of 13 Spanish solar park assets with more than 500 megawatts of capacity from X-Elio Energy SL, which is owned by Brookfield Renewable Partners LP and buyout firm KKR & Co.
The Chinese company was also among the final bidders for Grupo T-Solar, a green energy firm with a presence in Spain and Italy, which was acquired in December by Cubico Sustainable Investments Ltd. for 1.5 billion euros.
Three Gorges is the biggest shareholder in EDP-Energias de Portugal SA, in which the Masaveu family also holds a minority stake, according to data compiled by Bloomberg. Three Gorges issued a statement last month reiterating its commitment to EDP after selling a 2.5% stake in the company. The sale raised 534 million euros, leaving the state-owned firm with a 19% stake.
— With assistance by Manuel Baigorri, and Dong Cao
In Texas's Black-Swan Blackout, Everything Went Wrong at Once - Bloomberg
Wouldn't say it was a #BlackSwan, as most of the problems could have been mitigated.
"wind shutdowns accounted for 3.6 to 4.5 gigawatts -- or less than 13% -- of the 30 to 35 gigawatts of total outages, Ercot's Woodfin said. Gas produced 35% of the power in January.
"Natural gas played an outsize role in the disaster."
"Everyone wants to blame someone, so they blame Ercot"
In Texas's Black-Swan Blackout, Everything Went Wrong at Once
Natural gas output malfunctioned as wind turbines froze
The finger-pointing began immediately: It was the frozen wind turbines that foolishly replaced traditional sources. No, fossil fuels were at fault. No, Texas's deregulated power market, unique in the country, had allowed companies to skimp on maintenance and upgrades.
As the hours ticked by and millions more were plunged into frozen darkness, a more sober reality emerged. The greatest forced blackout in U.S. history, as this event has almost certainly become, was the result of a systemic and multifaceted failure. There are no promises of when power will be restored and little likelihood that the episode won't be repeated in a corner of the country hard hit by climate change.
"This feels like a technical design failure," said Michael Webber, who founded the Webber Energy Group at the University of Texas at Austin and serves as chief science and technology officer at French utility Engie.
Power plants weren't fully weatherized, wiping out generation capacity. The ones that were still standing struggled to get enough fuel, with shale wells experiencing so-called freeze-offs. Many wind turbines stopped spinning. Texas, with a grid notoriously isolated from the rest of the U.S., was unable to call on neighboring states for help.
Still, as the pressure dropped last week and frigid air descended from the north, some saw what was coming and felt like they were witnessing a train crash.
Reduces value of shale gas properties by more than $20 billion in Q4.
Exxon cut up to 15% of its workforce and delayed oil and gas projects after accepting oil prices could remain below $60 a barrel for years.
Added $22 billion to its debt last year to cover its dividend and project spending.
Exxon posts first annual loss as a public company on COVID-19 blow
(Reuters) -Top U.S. oil producer Exxon Mobil on Tuesday posted its first annual loss as a public company as the COVID-19 pandemic hammered energy prices and it reduced the value of its shale gas properties by more than $20 billion in the fourth quarter.
Exxon cut up to 15% of its workforce and delayed oil and gas projects after accepting oil prices could remain below $60 a barrel for years. It added $22 billion to its debt last year to cover its dividend and project spending.
The company reported a net annual loss of $22.44 billion for 2020, compared with a full-year profit of $14.34 billion in 2019.
Exxon posted four straight quarters of losses in 2020 and is under fire from activist investors pushing for board changes and a better strategy for a global transition to cleaner fuels.
Acquisition of Ubitricity comes as oil major expands presence along power supply chain
Street charging is expected to expand rapidly as customers who lack private driveways and those that wish to charge their vehicles overnight seek greater options
Royal Dutch Shell has agreed to buy Ubitricity, owner of the largest public charging network for electric vehicles in the UK, as the oil major expands its presence along the power supply chain.
Shell said on Monday it would buy 100 per cent of the company for an undisclosed amount. Ubitricity, founded in Germany, is a leading European provider of on-street charging for electric vehicles.
The company, which integrates electric car charging into street infrastructure such as lamp posts, has more than 2,700 charge points in the UK, giving it a market share of 13 per cent.
Shell said the acquisition would help it expand into on-street charging. It already has more than 1,000 fast and ultrafast charging points at 430 Shell retail stations and a greater number including those owned by partners and affiliates at forecourts and motorway service stations.
(Reuters) - Venezuelan officials have met in recent months with small domestic oilfield contractors to propose letting them operate fields owned by state-owned PDVSA while pocketing part of the proceeds, according to six people with knowledge of the talks.
FILE PHOTO: A state oil company PDVSA's logo is seen at a gas station in Caracas, Venezuela May 17, 2019. REUTERS/Ivan Alvarado/File Photo/File Photo
The talks show President Nicolas Maduro, facing a collapse in crude output and U.S. sanctions aimed at ousting him, is seeking to attract investments to the OPEC nation by offering even sweeter terms than a 2018 plan that walked back elements of the country's nationalist oil industry platform.
It was unclear whether any companies have actually signed the contracts under discussion. Any attempted opening to the private sector faces numerous obstacles including wariness about working with Petroleos de Venezuela after years of late payments, and concerns about Washington's sanctions.
So far, companies showing interest in the new deals are relatively small, including S&B Terra Marine Services, based near Lake Maracaibo in western Venezuela, and Arco Services, based in eastern Monagas state, according to three of the people, who spoke on the condition of anonymity.
Neither company responded to requests for comment, and neither did PDVSA nor Venezuela's oil ministry.
The government recently passed an "anti-blockade" law allowing oil deals to be signed confidentially, due to the risk of sanctions. In addition, members of the ruling socialist party - which recently gained control of the National Assembly in a disputed vote - have pledged to reform laws to allow greater private participation in the oil industry.
"We aim to increase production to 1.5 million barrels [per day] with new mechanisms of production, financing and commercialization," Maduro said in a Tuesday evening annual address to the National Assembly, without providing details.
That would restore production to 2018 levels after it slumped to just 434,000 barrels per day (bpd) in November.
Vice President Delcy Rodriguez said in a Wednesday state television interview that "various agreements" had been reached for oil investment as part of the anti-blockade law, without providing details.
PLUNGING OUTPUT
The OPEC nation's crude output has plunged to the lowest level in decades due to years of underinvestment and mismanagement, as well as U.S. sanctions. The drop has exacerbated a humanitarian crisis in which some 5 million people have emigrated.
"Since the government is closed out of many channels, they want to delegate responsibility to private companies and justify that delegation through the sanctions, the blockade, and the humanitarian impact," said one of the people.
While details of the proposed arrangements were not available, two of the people said they differed from the "joint services agreements" signed with a handful of little-known companies in 2018, allowing them to take charge of financing and equipment procurement. [reut.rs/3huB7dh]
Those companies, which only got paid if production increased, had little known oil industry experience, the people said.
The contracts now under discussion, with experienced PDVSA contractors, lack any output boost requirement, the people said.
Another key difference is that the current proposals would allow private companies to sell crude or refined products themselves as a form of compensation, three of the people said, adding the details were not yet clear. U.S. sanctions would likely complicate efforts by private companies to export oil.
The government has also been focusing on fields owned solely by PDVSA for the new arrangements, rather than its joint ventures with private companies, such as Chevron Corp and China National Petroleum Corp Ltd.
However, PDVSA has recently informally granted its minority partners at the joint ventures operational control of their fields.
Reporting by Luc Cohen and Corina Pons; Additional reporting by Deisy Buitrago; Editing by Christian Plumb and David Gregorio
Primarily as a result of higher oil prices, the 87 companies analyzed suffered Net losses from hedging derivatives were $11 billion in 3Q21, totaling almost $30 billion in the first three quarters of 2021.
A cyclist rides past a mural of oil pump jacks on the Boulevard de Sabana Grande in Caracas.Photographer: Carlos Becerra/Bloomberg
