MarketLine Blog

Posts tagged to Oil

BP back in Libya: British oil major is taking risks returning to chaotic country

MarketLine

For BP, a company which has suffered following massive bills incurred from the Deepwater Horizon disaster in the Gulf of Mexico, entering such a market may not immediately appear to be an example of prudent business decision making. Provided BP can drill oil reliably, and the country remains sufficiently stable to enable foreign companies to operate freely, the partnership with Eni to begin exploratory drilling in the early part of 2019 could prove fruitful. Exploring for oil at this stage could prove to be a valuable strategic move when viewed… Read more

US becomes world’s leading oil producer: Expanded oil production changes global industry dynamic

MarketLine

For a long time the US has been a leading oil player, but the combined might of OPEC was sufficient to reduce the global influence the country could have. However, thawing relations between Russia and Saudi Arabia reveal a decline in the ability of Gulf oil states to shape the international oil price according to domestic wants. Under such circumstances, expanding US production over much of the last decade has gone up against comparatively steady production from both Russia and Saudi Arabia. The US Energy Information Administration (EIA) predicts the… Read more

Saudi Arabia and Russia oil alliance: Desert kingdom requires Russian co-operation to solve economic problems

MarketLine

Petrostates have historically been wasteful in regard to spending the wealth generated by large-scale fossil fuel extraction. The desert kingdom of Saudi Arabia is no different, spending vast sums on subsidizing fuel and extensive social programs; most of the workforce is employed by the state, funded by oil. Now the country is undergoing significant reform to correct economic imbalances and diversify the economy. The Aramco IPO is driving Saudi Arabian policy, which in turn is likely to be directing the nature of OPEC policy. Oil futures for March 2019 are… Read more

Shinzo Abe reelected as tensions in Asia rise

MarketLine

Japan has in the past decade been hit by two major financial crises. The first one was the global financial crisis of 2008 and the second one came about following the Fukushima nuclear power plant disaster. The latter resulted in a nuclear meltdown and forced the Japanese government to immediately cease operations at all other nuclear power plants in the country, which together generated almost a third of all electricity consumed in Japan. As Japan increasingly relied on fossil fuel powered electricity in the aftermath of Fukushima, increased imports of… Read more

OPEC: Supply restriction amid global oil glut

MarketLine

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

Shell to Acquire BG

MarketLine

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

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

MarketLine

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

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

MarketLine

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