Many U.S. Companies Fail to Meet Requirements of Landmark Conflict Minerals Law
Nearly 80 per cent of U.S. public companies analyzed by human rights groups are failing to adequately check and disclose whether their products contain conflict minerals from Central Africa, a new report by Amnesty International and Global Witness reveals today.
The report, Digging for Transparency, analyzes 100 conflict minerals reports filed by companies including Apple, Boeing and Tiffany & Co under the 2010 Dodd Frank Act (Section 1502), known as the conflict minerals law. The findings point to alarming gaps in U.S. corporate transparency.
Under the law, more than one thousand U.S.-listed companies that believe they may source minerals from Central Africa submitted reports to the U.S. Securities and Exchange Commission (SEC) in 2014, the first year they were required to do so. The law is designed to reduce the risk that the purchase of minerals from Central Africa contributes to conflict or human rights abuses.
Consumers want to know what lies behind the logo
James Lynch, Head of the Business and Human Rights Team at Amnesty International
“The conflict minerals law is an opportunity to clean up global mineral supply chains. But our analysis shows that most companies seem to prefer business-as-usual to genuinely addressing the risk that their mineral purchases bankroll armed groups overseas,” said Carly Oboth, Policy Adviser at Global Witness.
“This is alarming. Well-funded industry groups have fought the conflict minerals law at every step. If companies had instead spent these resources on properly investigating and reporting on their supply chains, their customers would be more confident their goods were conflict free.”
The Democratic Republic of Congo (DRC) is an important source of minerals – including gold, tin, tungsten and tantalum – for global businesses. These minerals are essential for electronic devices, such as smartphones and laptops. For over fifteen years armed groups in eastern DRC have preyed on the mining sector to finance their operations with devastating impact, committing gross human rights abuses in the process.
The report’s key findings include:
79 of the 100 companies analyzed failed to meet the minimum requirements of the U.S. conflict minerals law.
Most companies in the sample are not doing enough to map out the supply chain of the minerals they purchase. Only 16 per cent go beyond their direct suppliers to contact, or attempt to contact, the smelters or refiners that process the minerals.
More than half of companies sampled do not even report to senior management when they identify a risk in their supply chain.
Global Witness and Amnesty International’s analysis also shows that one in five surveyed companies did comply with the law’s requirements. This dismantles the argument put forward that implementation is too difficult and too expensive – there is no excuse for companies failing to properly investigate their supply chains.
Companies that shed light on their supply chains help prevent a harmful mineral trade that contributes to a conflict devastating Central Africa
James Lynch
“Consumers want to know what lies behind the logo. Companies are under pressure to show they leave no stone unturned in their efforts to make sure products on the shelf don’t hide a terrible story of conflict and human rights abuse. A box-ticking exercise just won’t cut it,” said James Lynch, Head of the Business and Human Rights Team at Amnesty International.
“Companies that shed light on their supply chains help prevent a harmful mineral trade that contributes to a conflict devastating Central Africa.”
Dr. Denis Mukwege, the acclaimed Congolese surgeon and humanitarian, said: “Companies must do more to find out how the minerals they are buying have been produced and traded… In June, when companies file their second conflict minerals reports, they must show that they have put this right.”
Background:
1. Section 1502 requires all U.S.-listed companies under the scope of the law to determine whether products containing certain minerals – tin, tungsten, tantalum and gold – contribute to conflict or human rights abuses in the DRC and neighboring countries and to report on their findings. In total, 1321 companies filed Conflict Minerals Reports with the SEC. The second set of conflict minerals reports are due to be submitted in early June 2015.
2. Next month the European Parliament will vote on an EU-wide law on conflict minerals. Amnesty International and Global Witness are calling for the final text to include mandatory due diligence and reporting for all companies that place tin, tungsten, tantalum and gold or products that contain these minerals on the European market.
3. The U.S. Court of Appeals in the District of Columbia is reviewing its April 2014 decision that found unconstitutional the requirement for companies to describe their products as “not been found to be DRC conflict free”. It is critical that the District Court take action to ensure that free speech is not misused to thwart conflict mineral reporting and transparency of other corporate information that matters to consumers, investors and human rights advocates.
4. Where Digging for Transparency makes judgments on whether company Conflict Minerals Reports have met the minimum requirements of the U.S. Conflict Minerals legislation, this assessment is based on our view as expert organizations – which have carried out research into supply chains, conflict and human rights abuses over several years and helped create the OECD Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, along with industry – following detailed analysis of these reports against 12 criteria based on the final rule of Section 1502 and the OECD Guidance. The analysis in this report is based on the selected companies’ Conflict Minerals Reports submitted to the SEC and not material published elsewhere.
Pertamina Drilling Service Indonesia to Cooperate With GE Oil & Gas in Developing Solutions for Drilling Equipment and Services
JAKARTA, INDONESIA—— GE signed a Memorandum of Understanding (MoU) with Pertamina Drilling Services Indonesia (PDSI) to cooperate in developing integrated solutions for oil, gas and geothermal equipment and services.
The MoU sets the framework for GE and PDSI to jointly develop efficient and innovative drilling equipment and solutions for onshore and offshore applications. In addition, the cooperation will allow GE’s Oil and Gas solutions to be more closely aligned with Pertamina’s strategic objectives to better anticipate technology needs and streamline the delivery process.
This will include assessing the possibility of joint business development to market equipment and services to support oil, gas and geothermal operations in Indonesia, as well as explore potential opportunities to develop equipment maintenance workshop facilities, spare parts inventory, and a technical training center, which will build local service capabilities for Pertamina.
The MoU was signed by Faried Rudiono, President Director of Pertamina Drilling Services Indonesia and Iwan Chandra, President Director GE Oil and Gas Indonesia, witnessed by Syamsu Alam, Director of Upstream, PT Pertamina Persero; and Visal Leng, Asia Pacific Regional General Manager GE Oil and Gas
Faried Rudiono, President Director Pertamina Drilling Services Indonesia, said, “We hope through the support of GE’s Research & Development, PDSI will be able to deliver innovative solutions to our customers. Furthermore, this partnership will allow PDSI to capture new opportunities to drive the company’s growth.”
“GE is encouraged by the government’s commitment to accelerate infrastructure development in the country, especially in the Oil and Gas sector. With the increasing complexity in the industry, it is critical to bring innovations that can help increase efficiency and improve operations, and this is where GE can help,” said Visal Leng, GE Oil and Gas Regional General Manager Asia Pacific.
Iwan Chandra, President Director GE Oil and Gas Indonesia, added, “We are pleased to partner with PDSI in bringing the latest technology and solutions that can optimize operations for Indonesia’s Oil and Gas sector.”
Lelin Eprianto, Director of Marketing & Development PDSI, added,”This cooperation will help PDSI to achieve our vision to be an integrated drilling solution provider by bringing latest technology and resources from GE Oil and Gas Indonesia.”
PT Pertamina Drilling Services Indonesia (PDSI) is a subsidiary of PT Pertamina (Persero) that provides services and integrated drilling solutions for oil, gas and geothermal exploration , exploitation and work-over drilling. PDSI owns 42 land rigs, one joint operating offshore rig, and project locations across Indonesia. Based in Jakarta, the company has proven its professionalism by fullfilling the International Standard ISO 9001:2008 and OHSAS 18001:2007.
GE has been in Indonesia since 1940, providing the latest technology and solutions in aviation, transportation, power generation, energy management, oil and gas, health and lighting. GE has 800 employees in its 10 facilities and project locations in Indonesia in addition to its country head office in Jakarta, two factories in Batam and Yogjakarta, and a service center in Bandung.
In 2013, GE Oil and Gas expanded the capabilities of its manufacturing facility in Batam to be the first manufacturing facility in Asia Pacific to produce vertical subsea trees for deep water oil and gas production. This expansion underscores GE’s commitment to localizing more of our company’s business capabilities in Southeast Asia, especially in Indonesia to support the country’s local economic and energy goals.
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About GE Oil & Gas
GE Oil & Gas is a world leader in advanced technologies and services with 43,000 employees in 100 countries supporting customers across the industry—from extraction to transportation to end use. Our unrelenting commitment to the environment, health and safety, quality and integrity defines us: it’s The Way We Work.
We develop smart solutions for our customers across the oil and gas value chain delivering the innovation, customized service solutions, training programs and technology that helps them to maximize their efficiency, productivity and equipment reliability.
We partner with our customers to develop their next generation workforce; help them to fully benefit from the megatrends of natural gas, the growth of subsea and hard-to-reach reserves and the revolution in asset health management. Follow GE Oil & Gas on Twitter @GE_OilandGas.
About GE
GE (NYSE: GE) imagines things others don’t, builds things others can’t and delivers outcomes that make the world work better. GE brings together the physical and digital worlds in ways no other company can. In its labs and factories and on the ground with customers, GE is inventing the next industrial era to move, power, build and cure the world. www.ge.com
Chevron Announces Sale of Interest in Caltex Australia Ltd
SAN RAMON, Calif.– Chevron Corporation’s (NYSE: CVX) wholly owned subsidiary Chevron Global Energy Inc. today announced that it has entered into an underwriting agreement for the sale of its 50 percent shareholding in Caltex Australia Limited (CAL).
It is expected that these shares will be sold to a broad range of Australian and global equity market institutional investors.
“This transaction reflects Chevron’s commitment to regularly review our portfolio and generate cash to support our long-term priorities. It is aligned with our previously announced asset sales commitment,” said Michael Wirth, executive vice president, Downstream and Chemicals. “We appreciate the strong performance of Caltex Australia over the many years we’ve been a shareholder, and look forward to a mutually beneficial supply and brand relationship for many years to come.”
Mark Nelson, president, International Products, Downstream and Chemicals, Chevron, said: “Asia-Pacific is a core strategic focus for Chevron’s Downstream business and we remain focused on ensuring our operations, portfolio and investments are well-positioned to meet the region’s growing demand for energy.”
Today’s announcement does not alter Chevron’s focus on moving the Gorgon and Wheatstone liquefied natural gas (LNG) projects towards start-up. Chevron is one of Australia’s largest foreign investors and is the largest holder of natural gas resources in the country.
Caltex is a prominent brand in the Australian petroleum market. The current trademark licensing agreement between Chevron and CAL will remain in effect following the transaction. Chevron will continue to ensure a reliable, high-quality supply of product is available to CAL to supply to its retail and reseller franchise network. Chevron is also committed to seeking long-term relationship opportunities with CAL.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company’s success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com
China-owned Nexen Cuts 400 Jobs in North America and UK
Nexen Energy ULC announces organizational changes in response to industry downturn
Calgary, Alberta (March 17, 2015) – Nexen Energy ULC (Nexen), a wholly-owned subsidiary of CNOOC Limited, has announced organizational changes that will reduce its North American workforce by approximately 340 employees. Nexen UK has also initiated a consultation process to adjust its staffing levels by approximately 60 employees.
“In response to the recent industry downturn that has affected all companies in the energy sector, a decision was made to conduct a thorough review of our organization to ensure our long-term viability and sustainability,” said Fang Zhi, Chief Executive Officer of Nexen. “While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program. We take these decisions seriously, and all impacted employees have been treated fairly and with respect.”
“Nexen has enhanced its performance over the past two years. We have already demonstrated our ability to continuously improve as evidenced by our best-ever health, safety and environmental performance in 2014, our Oil Sands production rising by 40% since 2012 and our ability to bring on Golden Eagle, a major North Sea development, on-stream ahead of schedule and under budget.
“Our long-term perspective continues to be fundamental to how we make decisions for our organization. As one of the world’s largest oil and gas producers, CNOOC Limited is focused on driving long-term stability for the company. CNOOC Limited’s rationale for acquiring Nexen remains the same – it was not made with a short-term view, but rather to acquire, and responsibly develop long-term, quality resources.”
Nexen remains committed to the health and safety of its employees, contractors, the environment and the communities where it operates. The company is fully compliant with all of its Investment Canada undertakings.
Consideration of the Proposed Acquisition by LetterOne of North Sea Oil and Gas Fields owned by RWE Dea has concluded
The Department has been considering the proposed acquisition by LetterOne of twelve producing North Sea oil and gas fields currently owned by RWE Dea. The Secretary of State for the Department of Energy and Climate Change Ed Davey is responsible for ensuring the continued and safe production of the UK’s petroleum resources. In the discharge of these regulatory responsibilities, the Secretary of State has raised concerns with the respective companies about the effect that possible future sanctions imposed on LetterOne may have on the continued operation of these twelve fields and the serious health and safety and environmental risks that may result.
The companies have made a proposal designed to alleviate those concerns. After careful consideration the Secretary of State has decided that the proposal does not adequately and surely alleviate those concerns and has notified the companies involved that if the proposed acquisition were to proceed in its current form, he would be minded to require the companies to arrange for a further sale to a suitable third party.
Energy Union: Secure, Sustainable, Competitive, Affordable Energy For Every European
Energy is used to heat and to cool buildings and homes, transport goods, and power the economy. But with ageing infrastructure, poorly integrated markets, and uncoordinated policies, our consumers, households and businesses do not benefit from increased choice or from lower energy prices. It is time to complete the single energy market in Europe. Delivering on this top priority set out in President Juncker's political guidelines, today the European Commission sets out its strategy to achieve a resilient Energy Union with a forward-looking climate change policy.
The Energy Union means in particular:
Solidarity clause: reducing the dependence on single suppliers and fully relying on their neighbours, especially when confronted with energy supply disruptions. With more transparency when EU countries make deals to buy energy or gas from countries outside the EU;
Energy flows, as if it were a Fifth freedom: that of free flow of energy across borders - strictly enforcing the current rules in areas such as energy unbundling and the independence of regulators – taking legal action if needed. Redesigning the electricity market, to be more interconnected, more renewable, and more responsive. Seriously overhauling state interventions in the internal market, and phasing out environmentally harmful subsidies.
Energy efficiency first: fundamentally rethinking energy efficiency and treating it as an energy source in its own right so that it can compete on equal terms with generation capacity;
Transition to a low-carbon society that is built to last: ensuring that locally produced energy – including from renewables – can be absorbed easily and efficiently into the grid; promoting EU technological leadership, through developing the next generation of renewables technology and becoming a leader in electromobility, while European companies expand exports and compete globally.
In an Energy Union, citizens are at the core. The prices they pay should be affordable and competitive. Energy should be secure and sustainable, with more competition and choice for every consumer.
These and other commitments sit alongside an action plan to meet these ambitious goals in our energy and climate policy.
Jean-Claude Juncker, Commission President, said "For too long, energy has been exempt from the fundamental freedoms of our Union. Current events show the stakes – as many Europeans fear they may not have the energy needed to heat their homes. This is about Europe acting together, for the long term. I want the energy that underpins our economy to be resilient, reliable, secure and growingly renewable and sustainable."
Maroš Šefčovič, the Vice-President responsible for the Energy Union said: "Today, we launch the most ambitious European energy project since the Coal and Steel Community. A project that will integrate our 28 European energy markets into one Energy Union, make Europe less energy dependent and give the predictability that investors so badly need to create jobs and growth. Today, we set in motion a fundamental transition towards a low-carbon and climate-friendly economy, towards an Energy Union that puts citizens first, by offering them more affordable, secure, and sustainable energy. Together with all other Commissioners who have worked closely on the project team, and with the support of the entire Commission, I am determined to now turn this Energy Union into reality."
Miguel Arias Cañete, Commissioner for Climate Action and Energy said: "Let's get down to work. Today we have set the course for a connected, integrated and secure energy market in Europe. Now, let's make it happen. Our path to real energy security and climate protection begins here at home. That's why I will focus on building our common energy market, saving more energy, expanding renewables, and diversifying our energy supply. After decades of delay, we will not miss another opportunity to build an energy union. The Juncker Commission gets the big things right."
Key figures
The EU is the largest energy importer in the world, importing 53% of its energy, at an annual cost of around €400 billion.
12 EU Member States[1] do not meet the EU's minimum interconnection target – that at least 10% of installed electricity production capacity be able to "cross borders". The EU has listed 137 electricity projects, including 35 on electricity interconnection: between them, these projects could bring that figure from 12 down to 2 Member States.
An appropriately interconnected European energy grid could save consumers up to €40 billion a year.
6 EU Member States[2] are dependent on one single external supplier for all their gas imports.
75% of our housing stock is energy inefficient; 94% percent of transport relies on oil products, of which 90% is imported.
Over €1 trillion needs to be invested into the EU energy sector by 2020 alone.
Wholesale electricity prices in Europe are 30% higher, and wholesale gas prices over 100% higher, than in the US.
European renewable energy businesses have a combined annual turnover of €129 billion, employing over a million people. The challenge is to retain Europe's leading role in global investment in renewable energy.
EU greenhouse gas emissions fell 18% in the period 1990-2011.
By 2030, the EU aims to cut greenhouse gas emissions by at least 40%, boost renewable energy by at least 27%, and improve energy efficiency by at least 27%.
What has been adopted today
A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy. This sets out, in five interrelated policy dimensions, the goals of an energy union – and the detailed steps the Juncker Commission will take to achieve it, including new legislation to redesign and overhaul the electricity market, ensuring more transparency in gas contracts, substantially developing regional cooperation as an important step towards an integrated market, with a stronger regulated framework, new legislation to ensure the supply for electricity and gas, increased EU funding for energy efficiency or a new renewables energy package, focusing European R&I energy strategy, reporting annually on the 'State of the Energy Union', just to name a few.
An Interconnection Communication, setting out the measures needed to achieve the target of 10% electricity interconnection by 2020, which is the minimum necessary for the electricity to flow and be traded between Member States. It shows which Member States currently meet the target - and which projects are necessary to close the gap by 2020.
A Communication setting out a vision for a global climate agreement in Paris in December. The vision is for a transparent, dynamic and legally binding global agreement with fair and ambitious commitments from all parties. The Communication also translates the decisions taken at the European Summit in October 2014 into the EU's proposed emissions reduction target (the so-called Intended Nationally Determined Contribution, or INDC) for the new agreement.
GE Oil & Gas signs MoU with Kuwaiti Oil Company For Research And Development Engineers
FLORENCE, ITALY – GE Oil & Gas (NYSE: GE) has signed a Memorandum of Understanding (MoU) with the Kuwait Oil Company (KOC), a subsidiary of Kuwait Petroleum Company (KPC), to collaborate in the state of Kuwait in research and development (R&D), develop cost-effective solutions for the oil and gas sector and provide specialized training programs for engineers to strengthen Kuwaiti skilled talent.
The signing ceremony took place on the eve of the opening of the 16th GE Oil & Gas Annual Meeting in Florence. Rafael Santana, President & CEO, Turbomachinery Solutions signed the MoU on behalf of GE Oil & Gas and Hashem Hashem, CEO of KOC signed on behalf of KOC. Jeff Immelt, Chairman & CEO of GE and Lorenzo Simonelli, President & CEO of GE Oil & Gas were also present together with Mr Nizar Al-Adsani, CEO of Kuwait Petroleum Corporation.
“This agreement underlines our commitment to working in true partnership to promote the development of local human capital including technical skills of young engineers,” said Mr. Santana. Rami Qasem, president & CEO, GE Oil & Gas Middle East, North Africa & Turkey remarked “as a long-term partner of KOC, it is fantastic to be able to grow our relationship by sharing our knowledge base and advancing training initiatives in Kuwait.”
Hashem Hashem of KOC said: “As we go forward, realizing success will hinge on collaborating with local and international institutions. For this, KOC approached GE Oil & Gas to achieve a collaborative partnership that comes in-line with Kuwait International Petroleum Research Center’s (KIPRC) collaboration strategy and can be used to promote cooperation in areas that address our collective challenges and to support the acceleration of the learning curve in KOC in accordance with R&D/TM Roadmap. The parties, KOC and GE Oil & Gas, shall together promote cooperation in R&D and technology innovations, education and training and the development of KOC employees.”
GE Oil & Gas offers an extensive portfolio of highly reliable machinery and equipment to all segments of the oil and gas industry. With a global installed base of more than 20,000 units from production through transportation and processing into finished products, GE Oil & Gas is one of the industry’s major suppliers of turbomachinery, compressors, pumps, static equipment and metering systems.
GE Oil & Gas has a strong industry footprint across the Middle East region, and partners with leading oil and gas companies, petrochemical industries and power and water industry stakeholders. GE’s advanced technologies enable our customers to enhance the efficiency, reliability and productivity of their operations.
Join the conversation at our GE Hewar blog: http://middleeast.geblogs.com/
About KPC and KOC
From a position of strength, KPC launched an ambitious 2030 growth plan across the hydrocarbon value chain. Given the complexity of the challenges and in order to achieve this plan, KPC and its subsidiaries embarked on establishing KIPRCKOC R&D Group has been tasked to incubate KIPRC on KPC’s behalf and drive implementation of K- Company R&D Programs. The center envisions to being a preeminent applied R&D and Technology Management Centre that contributes to maximizing the value of Kuwait’s hydrocarbon resources in an effective and sustainable manner. To deliver on this vision, the center will provide customer-centric, collaborative, and cutting edge R&D and technology solutions through in-house capabilities and global partnerships. To date, KIPRC has enjoyed a number of key achievements. These include:
Developed an in-depth understanding of the technical challenges faced by the oil and gas sector in Kuwait and putting forward a 5-year R&D and technology roadmap
Developed an R&D Collaboration Strategy
Shaped the concept design of the architectural landscape that will host the R&D and technology activities.
Designed the operating model and identifying manpower requirements to deliver on our mandate.
About GE
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. www.ge.com.
About GE Oil & Gas
GE Oil & Gas works on the things that matter in the oil and gas industry. In collaboration with our customers, we push the boundaries of technology to bring energy to the world. From extraction to transportation to end use, we address today’s toughest challenges in order to fuel the future. Follow GE Oil & Gas on Twitter @GE_OilandGas
National Oil Bargaining Talks Break Down: USW Calls for Work Stoppage at Nine Oil Refineries, Plants
Pittsburgh — The United Steelworkers Union (USW) announced that it is calling for a work stoppage at the following US refineries:
LyondellBasell in Houston, TX;
Marathon Galveston Bay Refinery in Texas City, TX;
Marathon Houston Green Cogeneration facility, Texas City, TX;
Marathon Refinery, Catlettsburg, Ky;
Shell Deer Park Refinery, Deer Park, TX;
Shell Deer Park Chemical Plant, Deer Park, TX;
Tesoro Anacortes Refinery, Anacortes, Wash.;
Tesoro Martinez Refinery, Martinez, Calif.; and
Tesoro Carson Refinery, Carson, Calif.
All these refineries will go on strike at 12:01 am local time.
“Shell refused to provide us with a counter-offer and left the bargaining table,” said USW International President Leo W. Gerard. “We had no choice but to give notice of a work stoppage.”
The remaining USW-represented refineries and oil facilities are operating under a rolling 24-hour contract extension. The USW represents 65 U.S. refineries and over 230 refineries, oil terminals, pipelines and petrochemical facilities in the U.S.
“We told Shell that we were willing to continue bargaining for a fair agreement that would benefit the workers and the industry, but they just refused to return to the table,” said USW International Vice President Gary Beevers, who heads the union’s National Oil Bargaining Program.
“This work stoppage is about onerous overtime; unsafe staffing levels; dangerous conditions the industry continues to ignore; the daily occurrences of fires, emissions, leaks and explosions that threaten local communities without the industry doing much about it; the industry’s refusal to make opportunities for workers in the trade crafts; the flagrant contracting out that impacts health and safety on the job; and the erosion of our workplace, where qualified and experienced union workers are replaced by contractors when they leave or retire,” Beevers added.
The USW rejected Shell Oil Company’s last offer. It was the company’s fifth offer to the union. Shell is the lead company for the National Oil Bargaining talks. National negotiations focus on establishing a pattern on wages, benefits and working conditions. Local union and unit negotiations focus on local issues at the particular facility.
The union offered to bargain over a safe and orderly shutdown or a safe and orderly transitional release. Oil workers were told to stay at their posts until they were relieved or to finish out their shift.
“The oil companies do not want to work with us to improve the workplace and safety at oil refineries and facilities,” said USW International Vice President of Administration Tom Conway.
“This industry is the richest in the world and can afford to make the changes we offered in bargaining.
“The problem is that oil companies are too greedy to make a positive change in the workplace and they continue to value production and profit over health and safety, workers and the community.
“When the industry comes to its senses, we are more than willing to meet them at the bargaining table and negotiate a fair pattern agreement that will help everyone,” Conway added.
The union represents workers at 65 U.S. refineries that produce approximately 64 percent of the oil in the U.S.
The USW is the largest private-sector union in North America, representing 850,000 workers employed in metals, mining, rubber, paper and forestry, energy, chemicals, transportation, health care, security, hotels, and municipal governments.
Plunging Oil Prices Bring Gains and Losses to the Middle East and North Africa Region
WASHINGTON, – The over-50 percent decline in world oil prices—from US$115 a barrel in June 2014 to less than US$50 today—will have significant consequences for the economies of the Middle East and North Africa (MENA) region. According to the World Bank’s latest MENA Quarterly Economic Brief the oil importers that are expected to gain include Jordan, Tunisia, Lebanon and Egypt. The trade balances for these countries could improve by up to 2 percent of GDP. The oil exporters will likely run larger fiscal and current account deficits or their surpluses will shrink substantially.
“Oil importers will benefit from lower import and fuel subsidy bills, while exporters—some of whom depend on oil for 80 percent of their income—will lose export and fiscal revenues,” said Shanta Devarajan, World Bank Chief Economist for the Middle East and North Africa region.
The report, Plunging Oil Prices, focuses on the implications of low oil prices for eight developing countries, or the MENA-8 (oil importers: Egypt, Tunisia, Lebanon and Jordan and oil exporters: Iran, Iraq, Yemen and Libya) and the economies of the GCC (Gulf Cooperation Council), who play a major role in providing funds in the form of aid, investment, tourism revenues and remittances to the rest of the countries of the region.
Yemen and Libya are among the most vulnerable oil producers while Iran and Iraq could experience a worsening of the oil trade balance (net oil exports) in excess of 10 percent of GDP in 2015. The oil-exporting countries of the Gulf Cooperation Council are in a much better position due to their ample reserves, but they too could endure over a US$215 billion loss in oil revenues, more than 14 percent of their combined GDP.
“The oil shock could threaten the ability of some of the oil exporters to meet domestic spending commitments,” said Lili Mottaghi, World Bank MENA Economist and the author of the report. “Their options include drawing down reserves, accumulating debt, and cutting spending on fuel subsidies and public-sector salaries.”
Oil importers such as Egypt, Jordan and Lebanon face a risk as their economies receive large flows of remittances and aid from the GCC. However, based on previous episodes, the MENA Quarterly Brief concludes that lower oil prices will likely lead to slower growth, but not a decline in remittances.
Balancing Growth and Returns – Shell full year 2014 update By CEO Ben Van Beurden
Shell’s CEO Ben van Beurden today updates on 2014 performance and his priorities for the company, in presentations to financial markets.
Van Beurden commented: “Shell has delivered where it counts in 2014. We are stepping up our drive for stronger capital efficiency, whilst being careful not to over-react to the recent fall in oil prices.
Successful delivery of 2014 programme. Improved financial and operating performance including $25 billion free cash flow: strengthening of the balance sheet; $15 billion of dividends and share buybacks; reduction of capital investment; early completion of $15 billion divestment target; and implementation of tighter performance management.
2015 to see continuation of 2014 drive to balance growth and returns. New restructuring programmes in world-wide resources plays and upstream engines, leveraging oil price downturn to capture multi-billion supply chain cost opportunities world-wide, and plans to reduce Shell’s operating costs in 2015.
Organic capital investment in 2015 is expected to be lower than 2014 levels, and we have curtailed over $15 billion of potential spending over the next three years. Shell has options to further reduce spending, but we are not over-reacting to current low oil prices and keeping our best opportunities on the table.
Shell’s strategy is founded on disciplined capital investment, integrated operations, technological expertise and large scale. This is underpinned by an unrelenting focus on safety. Investment in long term opportunities is balanced with short term delivery.
Van Beurden continued: “We set out an agenda in 2014 to balance growth and returns in Shell, and our results in 2014 show that this strategy is impactful where it matters: at the bottom line. By successfully delivering against our three key priorities of better financial performance, enhanced capital efficiency and continued strong project delivery, we are improving Shell’s competitive position in the oil & gas industry.”
Delivery in 2014 included:
Improved earnings and returns, including $25 billion of free cash flow, underpinning $15 billion of dividends and share buybacks.
Tighter performance management and accountability implemented across the company, including increased shareholding requirements for senior management to further align interests with shareholders.
Restructuring programmes and cost reduction in North America resources plays, where major portfolio changes are now complete; and in Oil Products, where substantial progress has been made and new cost programmes were launched at the end of 2014.
Increased asset sales – some $15 billion in 2014, completed before markets weakened across the end of the year, and reduced capital spending, as we make decisions on portfolio to improve Shell’s capital efficiency.
Successful delivery of new projects including deep water, and successful integration of the LNG portfolio purchased from Repsol, which delivered over $1 billion to CFFO in 2014.
A firm uptick in the 2014 exploration performance, with 10 material discoveries in frontier and heartland basins, and a further 41 near-field discoveries.
Van Beurden continued: “Our strategy is delivering, but we’re not complacent. Weaker oil prices underline that there’s a lot more to do. The three themes of financial performance, capital efficiency and project delivery will remain as Shell’s priorities in 2015.”
In 2015, these priorities will include a focus on the following:
Financial performance
This will include a continued drive to improve performance in Oil Products and North America resources plays, and new restructuring programmes in Upstream engines and International resources plays.
Cost competitiveness is integral to our tighter performance management drive. Our established programmes and new initiatives are expected to move operating costs down in 2015.
Capital efficiency
Given Shell’s rich portfolio funnel and today’s lower oil prices, investment levels are under severe pressure in the near term. Today’s lower prices are creating opportunities to reduce our own costs and to take costs out of the supply chain, where there is multi-billion dollar savings potential for Shell.
In addition, the company is deferring spending in many areas, without compromising on HSSE, exiting selective growth positions, and driving costs down in the supply chain. This should result in reduction of potential capital investment for 2015-17 of over $15 billion.
2015 organic capital investment is expected to be lower than 2014 levels. Shell is considering further reductions to capital spending should the evolving market outlook warrant that step, but is aiming to retain growth potential for the medium term.
Project delivery
2015 should see further ramp-up from the new fields brought on line in 2014. The company continues to invest in a competitive suite of new oil & gas fields and LNG, with the next wave of significant start-ups in the 2016-18 timeframe.
Van Beurden continued: “The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn. However, lower oil prices and the impact of our 2014 divestments will likely reduce this year’s cash flow.”
Shell announced dividends of $12 billion in 2014 and repurchased $3.3 billion of shares. We slowed our buyback program at the end of 2014 to conserve cash, and near-term oil prices will dictate the buyback pace.
Van Beurden concluded: “We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns.”
BP Issues Second Annual US Economic Impact Report Detailing its Role as America’s Largest Energy Investor
WASHINGTON – BP’s business activities in the US helped generate close to $143 billion in economic impact in 2013 and currently support nearly 220,000 American jobs, according to the company’s US Economic Impact Report 2014.
Released today, BP’s new report provides a detailed, state-by-state look at the breadth and impact of the company’s activities in America. Since 2009, BP has invested nearly $50 billion, making it America’s largest energy investor. In 2013 alone, BP spent $22 billion with vendors across the country on products and services, ranging from offshore drilling rigs to gasoline-producing equipment for its refineries.
“No energy company has invested more in the US over the past five years than BP,” said John Mingé, BP America chairman and president. “Our investments not only provide the energy to power the nation, but they also support hundreds of thousands of jobs that fuel the economy.”
BP’s business investments in the US include oil and natural gas exploration and production, fuel and chemical refining, lubricants, shipping, trading, renewable energy production and cutting-edge technology research and development. The US also is home to a number of operations that serve BP’s global businesses, such as the Center for High-Performance Computing in Houston, which houses the world’s largest supercomputer for commercial research.
BP produces more than 628,000 barrels of oil equivalent a day – enough to light nearly the entire country. The company’s three northern-tier refineries in Indiana, Ohio, and Washington are together capable of processing more than 742,000 barrels of oil per day. Also, BP’s chemical and lubricant facilities supply materials necessary for modern life, including greases and engine oils marketed under the Castrol brand and chemicals used in fabrics and packaging.
In addition to physical assets and energy production, the US is home to nearly 40 percent of BP’s publicly traded shares and more BP employees than any other nation. The US also is a center for BP research and recruitment. The company will spend $60 million this year on academic research, educational initiatives, and recruitment activities at more than 50 US universities.
At the corporate level, BP contributes more than $30 million a year to charitable and nonprofit organizations such as United Way of America and the National Multiple Sclerosis Society. This includes contributions through BP’s unique Fabric of America program in which BP employees may annually designate $300 of corporate funds to a nonprofit organization of their choice within the United States. Since the fund’s 2007 inception, BP has given more than $26 million on behalf of our employees, helping to support roughly 19,000 organizations in all 50 states.
The investments and spending detailed in the report do not include costs associated with cleanup and restoration activities in the Gulf of Mexico, or claims payments related to the Deepwater Horizon accident.
To view or download BP’s full US Economic Impact Report 2014, please visit: www.bp.com/EIR.
BP in the US – By the Numbers:
Employees: More than 18,000 employees
Total Jobs Supported: Nearly 220,000 jobs
Employee Payroll and Benefits: $5 billion, including pensions and other post-employment costs
National Economic Impact Nearly: $143 billion in 2013
BP U.S. Investment since 2009: Nearly $50 billion – the most of any energy company
Money Spent with Vendors: More than $22 billion in 2013
Community Investment: $30 million in corporate contributions annually
About BP in the US:
Over the past five years, BP has invested nearly $50 billion in the US – more than any other energy company. BP is a leading producer of oil and gas and provides enough energy annually to light nearly the entire country for a year. Employing more than 18,000 people in all 50 states, BP supports around 200,000 additional jobs through all of its business activities. For more information, go to www.bp.com/EIR.
Halliburton Announces Integration Leadership for Baker Hughes Acquisition
HOUSTON – Halliburton Company (NYSE: HAL) today announced its Board of Directors has appointed Executive Vice President and Chief Financial Officer Mark McCollum to the new role of Executive Vice President and Chief Integration Officer. In this capacity, he will serve as head of the Joint Integration Team that Halliburton and Baker Hughes Incorporated (NYSE: BHI) are assembling in connection with Halliburton’s pending acquisition of Baker Hughes. Mr. McCollum will continue reporting to Dave Lesar, Chairman and Chief Executive Officer of Halliburton, and will remain a member of the company’s Executive Committee.
Christian Garcia, Senior Vice President and Chief Accounting Officer, will become Senior Vice President of Finance and assume Mr. McCollum’s CFO responsibilities on an interim basis. It is anticipated that Mr. McCollum will resume his CFO duties at the conclusion of the two companies’ integration. Mr. Garcia will report to Mr. Lesar and will join Halliburton’s Executive Committee. Charlie Geer, currently Vice President of Finance, will become Vice President and Corporate Controller and will take over Mr. Garcia’s accounting responsibilities on an interim basis as well. He will continue reporting to Mr. Garcia. The new roles are effective January 1, 2015.
Belgacem Chariag, President of Global Products and Services for Baker Hughes, will serve as lead for Baker Hughes on the Joint Integration Team.
“Establishing a unified integration team under the direction of Mark and Belgacem is an important first step in bringing together the talent and expertise of both companies to make a stronger combined company,” said Mr. Lesar. “We are committed to putting together a detailed and thoughtful integration plan to make the post-closing transition as seamless, efficient and productive as possible.”
On Nov. 17, Halliburton and Baker Hughes jointly announced a definitive agreement under which Halliburton will, subject to the conditions set forth in the agreement, acquire Baker Hughes in a stock and cash transaction.
About Halliburton
Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry. With more than 80,000 employees, representing 140 nationalities in over 80 countries, the company serves the upstream oil and gas industry throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field. Visit the company’s website at www.halliburton.com. Connect with Halliburton on Facebook, Twitter, LinkedIn, Oilpro, and YouTube.
Chevron and SK LNG Trading Sign Gorgon LNG Supply Agreement
SAN RAMON, Calif., – Chevron Corporation (NYSE: CVX) today announced its Australian subsidiaries have signed a binding Sales and Purchase Agreement (SPA) with SK LNG Trading Pte Ltd (SK). Under the SPA, SK LNG Trading, which is part of a leading industrial conglomerate in South Korea, will receive 4.15 million tons of LNG over a five-year period starting in 2017.
During the time of this agreement, over 75 percent of Chevron’s equity LNG from Gorgon will be committed to customers in Asia.
“This agreement is an important step in the commercialization of Chevron’s significant natural gas holdings in Australia,” said Pierre Breber, president, Chevron Gas and Midstream. “As Chevron continues to grow into one of the world’s largest LNG suppliers, this SPA represents further progress and diversification of our sales portfolio.”
“We are pleased with the opportunity to supply LNG to SK and look forward to building lasting relationships with our customers in the region as the Gorgon and Wheatstone projects move into operations,” said Roy Krzywosinski, managing director, Chevron Australia. “SK joins our existing strong LNG customer base and demonstrates the Chevron-led Gorgon and Wheatstone projects are well-placed to meet the growing demand for natural gas in the Asia-Pacific region.”
The Chevron-operated Gorgon Project is a joint venture of the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).
The Gorgon Project combines the development of the Gorgon Field and the nearby Jansz-Io Field. Facilities being built on Barrow Island include a liquefied natural gas (LNG) facility with three processing units capable of producing 15.6 million metric tons of LNG per year, a carbon dioxide injection project and a domestic gas plant.
Chevron is also developing the Wheatstone Project as an LNG and domestic gas operation near Onslow, in the Pilbara region of Western Australia. The project’s initial capacity is expected to be 8.9 million metric tons per year of LNG. The project also includes a domestic gas plant.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
BHP Billiton Operational Performance Over the Last Six Months Has Been Strong – CEO, Andrew Mackenzie
– Group production increased by 9% during the December 2014 half year with records achieved for eight operations and five commodities. Production guidance remains unchanged and we are on track to deliver Group production growth of 16% over the two years to the end of the 2015 financial year.
– Metallurgical coal production increased by 21% to 26 Mt in the December 2014 half year as Queensland Coal and Illawarra Coal both achieved record half year volumes.
– Western Australia Iron Ore production increased by 15% to a record of 124 Mt (100% basis) in the December 2014 half year as the ramp-up of Jimblebar continued and we improved the availability, utilisation and rate of our integrated supply chain.
– Petroleum production increased by 9% to a record 131 MMboe in the December 2014 half year supported by a 71% increase in Onshore US liquids volumes to 24.4 MMboe.
– Copper production(1) decreased by 2% to 813 kt as strong underlying operating performance across the business was offset by lower grades at Antamina.
– Record manganese ore and alumina production was underpinned by strong performances at both Hotazel and the Alumar refinery.
BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: “Our operational performance over the last six months has been strong. We are reducing costs and improving both operating and capital productivity across the Group faster than originally planned. These improvements will help mitigate some of the impact of lower commodity prices and we remain alert to opportunities to further increase free cash flow.
“In Petroleum, we have moved quickly in response to lower prices and will reduce the number of rigs we operate in our Onshore US business by approximately 40 per cent by the end of this financial year. The revised drilling program will benefit from significant improvements in drilling and completions efficiency. Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage. However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.
“We continue to believe that our planned demerger will help support further improvements in operating performance in both the core BHP Billiton and South32 assets. Within BHP Billiton, it would allow us to identify and deploy best practice across our assets more quickly and simplify our organisation to reduce overheads. We are making good progress towards securing the approvals we require to put the proposal to a shareholder vote in May and remain on track to complete the process before the end of the financial year.”
Major development projects
The Escondida Oxide Leach Area Project was successfully completed during the December 2014 quarter and the BMA Hay Point Stage Three Expansion project loaded first coal on 12 January 2015, both on revised schedule and budget. The Escondida Oxide Leach Area Project will not be reported in future Operational Reviews. At the end of the December 2014 half year, BHP Billiton had seven major projects under development with a combined budget of US$13.5 billion.
Corporate update
On 8 December 2014, BHP Billiton announced that the new company it intends to create through its proposed demerger will be called South32. A final Board decision on the proposed demerger will be made once all necessary third party approvals are secured on satisfactory terms. On this basis, BHP Billiton expects to release all shareholder documentation with full details of the proposed demerger in mid-March 2015, with a shareholder vote taking place in early May 2015. The demerger remains on track to be completed in the first half of the 2015 calendar year.
BHP Billiton expects Underlying attributable profit in the December 2014 half year to include impairment charges in the range of approximately US$200 million to US$250 million recognised as a result of the divestment of conventional petroleum assets in North Louisiana and unconventional gas assets in the Pecos field in the Permian.
The Minerals Resource Rent Tax (MRRT) in Australia has been repealed and was applicable until 30 September 2014. As a result, the MRRT deferred tax asset carried by the Group was derecognised and an income tax charge of US$809 million will be reported as an exceptional item in the December 2014 half year. The Group’s adjusted effective tax rate(4) is expected to remain in the range of 30 per cent to 34 per cent in the December 2014 half year.
On 12 November 2014, BHP Billiton announced that the review of its Nickel West business was complete and the preferred option, the sale of the business, was not achieved on an acceptable basis. As a result of operational decisions made subsequent to the conclusion of this process, an impairment charge in the range of US$200 million to US$350 million (after tax expense) will be recognised as an exceptional item in the December 2014 half year. At this time, Nickel West remains in the BHP Billiton portfolio and the Company continues to operate the business to maximise production, reduce operating costs and increase free cash flow. This guidance will be updated should material information or events arise as the Company finalises its financial statements.
Marketing update
The average realised prices achieved for our major commodities are summarized in the table below. Iron ore shipments, on average, were linked to the index price for the month of shipment, with price differentials reflecting product quality. The majority of metallurgical coal and energy coal exports were linked to the index price for the month of shipment or sold on the spot market, with price differentials reflecting product quality.
At 31 December 2014, the Group had 322 kt of outstanding copper sales that were revalued at a weighted average price of US$2.87 per pound. The final price of these sales will be determined over the remainder of the 2015 financial year. In addition, 350 kt of copper sales from the 2014 financial year were subject to a finalization adjustment in the current period. The provisional pricing and finalization adjustments will decrease earnings before interest and tax by US$210 million in the December 2014 half year (December 2013 half year: US$196 million increase).
Total petroleum production – Total petroleum production increased by nine per cent in the December 2014 half year to a record 131.0 MMboe. Guidance for the 2015 financial year remains unchanged at 255 MMboe. Crude oil, condensate and natural gas liquids – Crude oil, condensate and natural gas liquids production increased by 24 per cent in the December 2014 half year to 62.1 MMboe.
Onshore US liquids volumes rose by 71 per cent in the December 2014 half year to a record 24.4 MMboe. This strong performance was underpinned by continued momentum in the Black Hawk and Permian where liquids production increased by 81 per cent and 107 per cent, respectively.
In our Conventional business, liquids production at Pyrenees and Atlantis increased by 34 per cent and 12 per cent, respectively, supported by strong uptime performance and the completion of new production wells in the second half of the 2014 financial year.
Natural gas – Natural gas production declined by two per cent in the December 2014 half year to 413 bcf. Strong uptime performance at North West Shelf and Macedon partially offset lower seasonal demand at Bass Strait and the divestment of Liverpool Bay which was completed in the 2014 financial year.
Onshore US development activity
Onshore US drilling and development expenditure totalled US$1.9 billion in the December 2014 half year. In response to weaker prices, the Company will reduce its operated rig count from 26 at period end to 16 by the end of the 2015 financial year. An update to the drilling and development expenditure budget for the 2015 financial year will be provided with the release of our interim results in February 2015.
The majority of the revised drilling program will be focused on our liquids-rich Black Hawk acreage with activity in the Permian and Hawkville limited to the retention of core acreage. The Company’s dry gas development program will be reduced to one operated rig in the Haynesville, with a focus on continued drilling and completions optimisation ahead of full field development.
The reduction in drilling activity will not impact 2015 financial year production guidance and we remain confident
that shale liquids volumes will rise by approximately 50 per cent in the period.
Petroleum exploration expenditure for the December 2014 half year was US$268 million, of which US$244 million was expensed. Total petroleum exploration expenditure for the 2015 financial year is now forecast to be US$600 million, a 20 per cent reduction from prior guidance. The program will remain focused on the Gulf of Mexico, Western Australia and Trinidad and Tobago.
The seismic acquisition program in Trinidad and Tobago was successfully completed for the seven deep water blocks accessed between 2012 and 2014. The acquisition for the two blocks awarded in the 2014 deep water bid round is progressing on schedule.
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Shell’s Nigerian Subsidiary Agrees £55 million Settlement With the Bodo Community
Shell’s Nigerian subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), has today announced a £55 million settlement agreement with the Bodo community in respect of the two highly regrettable operational spills in 2008.
The £55 million settlement provides for an individual payment to each claimant who accepts the settlement agreement in compensation for losses arising from the spills, amounting to up to £35 million in total. The remaining £20 million payment will be made for the benefit of the Bodo community generally.
“From the outset, we’ve accepted responsibility for the two deeply regrettable operational spills in Bodo. We’ve always wanted to compensate the community fairly and we are pleased to have reached agreement,” said Mutiu Sunmonu, Managing Director of SPDC.
“We are fully committed to the clean-up process being overseen by the former Netherlands’ Ambassador to Nigeria. Despite delays caused by divisions within the community, we are pleased that clean-up work will soon begin now that a plan has been agreed with the community.
“However, unless real action is taken to end the scourge of oil theft and illegal refining, which remains the main cause of environmental pollution and is the real tragedy of the Niger Delta, areas that are cleaned up will simply become re-impacted through these illegal activities.
“SPDC has made great efforts to raise awareness of the issue with the government of Nigeria, international bodies like the United Nations, the media, civil society and international non-governmental organisations (NGOs), and we will continue to play an active role in the search for solutions. We urge all those with influence, including Bodo community leaders and NGO groups, to support this effort.”
Royal Dutch Shell plc
Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 70 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit www.shell.com.
Chevron Acquires Blocks Offshore New Zealand – Frontier exploration offers long-term opportunities for growth
Wellington, New Zealand, – Chevron New Zealand Exploration Ltd., a Chevron Corporation subsidiary, today announced it has been granted exploration rights to three blocks located offshore New Zealand, in a frontier basin with water depths ranging from 2,600 feet (800 m) to 9,800 feet (3,000 m).
“This award adds to Chevron’s range of potential long-term options in the Asia-Pacific region,” said Melody Meyer, president of Chevron Asia Pacific Exploration and Production Company. “Chevron’s approach to this project will be guided by our commitment to maintain the highest environmental and safety standards.”
The three petroleum exploration permits – 57083, 57085 and 57087 – in the offshore Pegasus and East Coast basins, cover more than 6.26 million acres (25,300 sq. km), and are located southeast of North Island. Chevron New Zealand Exploration Ltd. will be the operator of the blocks with a 50 percent working interest. Statoil will hold the remaining 50 percent interest.
Chevron has operated in the downstream sector of New Zealand for more than 90 years, and plans to continue to build on these relationships with communities and government.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, California. More information about Chevron is available at www.chevron.com.
Chevron Confirms First Oil Production from Tubular Bells in the Gulf of Mexico
SAN RAMON, Calif., – Chevron Corporation (NYSE: CVX) announced today that the Hess Corporation-operated Tubular Bells deepwater project, located in the U.S. Gulf of Mexico, has started crude oil and natural gas production. The field is located 135 miles (217 km) southeast of New Orleans, in approximately 4,300 feet (1,310 m) of water in the Mississippi Canyon area. The discovery well was drilled in 2003, and project construction began in October 2011.
Tubular Bells is expected to deliver total production of approximately 50,000 barrels of oil- equivalent per day producing from three wells.
“The deepwater Gulf of Mexico plays a significant part in our earnings and production growth. Achieving first oil at Tubular Bells is an important step towards Chevron achieving its production goal of 3.1 million barrels per day by 2017”, said George Kirkland, vice chairman and executive vice president, Upstream, Chevron Corporation.
“Tubular Bells and the Chevron-operated Jack/St. Malo project further strengthens Chevron’s deepwater portfolio,” said Jay Johnson, senior vice president, Upstream, Chevron Corporation. Jack/St. Malo, a large lower Tertiary development, is scheduled to be brought online later this year.
“This project’s success is the result of our strong business relationship with Hess, reinforcing our commitment to achieve results with excellence, and enabling new opportunities in this strategic area,” said Jeff Shellebarger, president, Chevron North America Exploration and Production Company.
The Tubular Bells production facility is producing from the Miocene trend, where, for many years, Chevron subsidiaries have had multiple producing assets and a leading leaseholder position.The floating production facility is a classic spar hull with traditional three-level topsides. The field has an estimated production life of 25 years.
Chevron subsidiary Chevron U.S.A. Inc. has a 42.86 percent working interest in the Tubular Bells development and Hess is the operator with a 57.14 percent working interest in the field.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
Phillips 66 and Energy Transfer Announce Open Season for Nederland to St. James Crude Oil Pipeline
HOUSTON & DALLAS –Phillips 66 (NYSE:PSX) and Energy Transfer Partners, L.P. (NYSE:ETP) today announced the launch of a binding open season to assess interest in committed service under local tariffs for crude oil pipeline transportation originating at Nederland, Texas, for deliveries to various crude oil terminals and refineries in the vicinity of Lake Charles and St. James, Louisiana.
The binding open season will commence at 12 p.m. CST on Dec. 1, 2014. Bona fide potential shippers that would like to receive copies of the open season documents, the throughput and deficiency agreement, and proposed tariffs must first sign a confidentiality agreement. More information about the open season will be available on the ETP website at www.energytransfer.com/ops_lc_sj.aspx upon commencement of the open season or by e-mail request to lc_sj@energytransfer.com.
About Phillips 66
Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in a changing energy landscape. Headquartered in Houston, the company has 14,000 employees who are committed to operating excellence and safety. Phillips 66 had $50 billion of assets as of Sept. 30, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.
About Energy Transfer Partners
Energy Transfer Partners, L.P. (NYSE:ETP) is a master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently owns and operates approximately 35,000 miles of natural gas and natural gas liquids pipelines. ETP also owns 100% of Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and a 70% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 67.1 million common units in Sunoco Logistics Partners L.P. (NYSE:SXL), which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP owns 100% of Sunoco, Inc. and 100% of Susser Holdings Corporation. Additionally ETP owns the general partner, 100% of the incentive distribution rights and approximately 44% of the limited partnership interests in Sunoco LP (formerly Susser Petroleum Partners LP) (NYSE:SUN), a wholesale fuel distributor and convenience store operator. ETP’s general partner is owned by ETE. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.
Weaker Outlook For Oil-exporting Countries To Trim 2015 Demand Growth – IEA Report For December
The IEA Oil Market Report (OMR) for December cut the outlook for 2015 global oil demand growth by 230 000 barrels per day (230 kb/d) to 0.9 million barrels per day (mb/d) on lower expectations for the Former Soviet Union and other oil‐exporting countries.
The monthly report told subscribers that a strong dollar and the lifting of subsidies have so far limited supportive price effects on demand, which is now seen reaching 93.3 mb/d next year, from 92.4 mb/d in 2014.
Global production fell by 340 kb/d in November to 94.1 mb/d on lower OPEC supplies. Annual gains of 2.1 mb/d were split evenly between OPEC and non‐OPEC producers. Surging US light tight oil supply looks set to push total non‐OPEC output to record growth of 1.9 mb/d for 2014, but the pace is expected to slow to 1.3 mb/d for next year.
OPEC crude supply declined by 315 kb/d in November to 30.32 mb/d after Libya’s recovery stumbled, but it stood 765 kb/d than in November 2013. The “call on OPEC crude and stock change” for 2015 was revised down by 300 kb/d to 28.9 mb/d. The “call” is expected to decline seasonally by 1.2 mb/d from this quarter to the first quarter of 2015.
Global refinery crude throughputs bounced back in November from a seasonal low of 76.8 mb/d in October. The estimate of throughputs this quarter has been revised sharply higher since the previous OMR, to 78 mb/d, as refiners apparently took advantage of healthy margins ahead of a flurry of refinery start‐ups expected early next year.
OECD industry stocks built counterseasonally in October to 2 720 mb, their highest level in more than two years. Stocks ended at a surplus to their five‐year average for the first time since March 2013. Rising crude supply and peak seasonal refinery maintenance saw crude stocks surge by 34.4 mb and product stocks fall by 30.7 mb.
The December OMR also informed subscribers about remaining capacity for OECD storage, recent developments in Chinese stocks, Petrobras’ start-up of its first new refinery in 34 years and the finalisation of long-debated amendments to Russian oil laws know as the “tax manoeuver”.
BP Presents Upstream Strategy To Investors – Expects $1 billion In Group-wide Restructuring Charges
BP presents to investors its strategy and plans to the end of the decade and beyond for its Upstream oil and gas business.
The presentation, led by BP’s Upstream chief executive Lamar McKay, provides an in-depth and detailed account of how BP is managing its Upstream business and its distinctive strategy for the long term. The presentation also reviews the macro-environment and the context of recent developments in oil prices.
McKay and senior members of his upstream management team will share further insights into the depth and quality of the Group’s resource base and investment portfolio, which underpin BP’s long-term value proposition through the changes in the price environment.
“Although the current environment is challenging, BP is well-positioned to respond and manage our Upstream business for the long term,” said Lamar McKay. “We expect to see growth from our conventional and deepwater assets and an increasing contribution from gas. And we also have a quality pipeline of opportunities that we believe are capable of extending underlying growth well beyond 2020. Our focus throughout will remain firmly on safe operations, execution efficiency and greater plant reliability.”
BP also said today that, as part of its wider ongoing Group-wide programme to simplify across its Upstream and Downstream activities and corporate functions, it expects to incur non-operating restructuring charges of circa $1 billion in total over the next five quarters, including the current quarter. Details of these charges and further guidance on the programme are expected to be given with each quarter’s results.
Group Chief Executive Bob Dudley said: “We have already been working very hard over these past 18 months or so to right-size our organisation as a result of completing more than $43 billion of divestments. We are clearly a more focused business now and, without diverting our attention from safety and reliability, our goal is to make BP even stronger and more competitive.
“The simplification work we have already done is serving us well as we face the tougher external environment. We continue to seek opportunities to eliminate duplication and stop unnecessary activity that is not fully aligned with the group’s strategy.”
As an integrated group, not all BP’s businesses are equally exposed to the oil price. About one third of its Upstream projects around the world are operated under production sharing contracts and it is also investing in high quality gas projects which are typically less sensitive to oil price movements. Importantly, while BP approves projects at $80 a barrel, it also already tests each at $60 a barrel to understand the resilience of the portfolio at a range of prices. It will also continue to consider lower price sets as appropriate.
BP also has a strong balance sheet, with historically low gearing of 15% at the end of the third quarter of 2014, which provides time and flexibility to adjust to changes in the environment.
Across the Group, BP has said it will be looking to pare or re-phase capital expenditure without compromising safety or future growth. In October, BP told investors this could result in reductions of $1 billion to $2 billion in capital expenditure across the Group in 2015 against guidance of $24 billion to $26 billion laid out in March. This will be reviewed further as part of the 2015 plan, recognising the current outlook for oil prices.
When oil prices fall, there is typically deflation in the industry as a whole. Together with its already greater focus on streamlining activity, this would be expected to further help BP align its cost base with its smaller footprint and reduced activity levels.
The Upstream team will today detail the business’s track record of delivery as part of the Group’s 10-point plan. Amongst the milestones, over the last three years, the Upstream has improved safety and reliability of operations; doubled exploration drilling activity; and rebuilt Gulf of Mexico production. It has also increased the rate of reinvestment; made $32 billion of divestments in the Upstream business alone; and, by year end, also expects to have delivered 15 new upstream projects with average operating cash margins double 2011 average.
Between now and 2020, the Upstream team’s focus will be on delivery, through safe and reliable operations, strong execution in the existing base business, and the start-up of a suite of new projects which are expected to be capable of adding over 900,000 barrels of oil equivalent a day of net incremental production to BP’s portfolio by 2020. BP will also be progressing opportunities expected to continue to drive underlying growth into the next decade as it builds out its well-established conventional and deepwater oil positions and a distinctive and material portfolio of gas options.
