Going down…?

14 03 2014

Shell-SplatAndHorns (square)Oh boy……  the oil industry sure seems to be in a mess.  Remember Steven Kopits’ presentation?  The one where he announced Shell had to borrow money to pay its shareholders’ dividends?  Remember Shell pulling out of Australia..?  Well, it gets worse…

Shell Cuts Americas Spending by 20%, Extends Refinery Sales

Royal Dutch Shell Plc (RDSA) plans to lower spending in the Americas by a fifth as Europe’s largest oil producer focuses on more profitable operations.

It’s “not acceptable” that Shell, now deploying about 36 percent or $80 billion of its capital in North America, has been losing money, Chief Executive Officer Ben van Beurden said.

royal-dutch-shell-net-income-net-income_chartbuilder-1Shell expects to reduce capital investment in upstream operations, or exploration and production, in the Americas by 20 percent this year and North American resource spending by the same proportion, the company said today in a presentation.

“That leaves us with about $10 billion in total for the upstream Americas and about $4 billion for the shale,” Chief Financial Officer Simon Henry said. “Some of that does include Argentina and Canada. It’s not all in America.”

Van Beurden has pledged to shrink spending costs this year and speed up asset sales including refineries after The Hague-based company issued its first profit warning in a decade. He also scrapped targets for cash flow, delayed drilling off Alaska and promised to restructure shale operations in North America.

“Upstream Americas profitability has been impacted by losses in resources plays such as shales,” Shell said today in a statement. “The company intends to drive hard choices on capital allocation for selective growth and divestment of non-strategic positions.”

Now……  you can’t tell me this isn’t going to impact the “great big complex society”…….

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10 responses

14 03 2014
Eclipse Now

Good. It seems that oil lasted *just* the right amount of time for us to develop EV’s with electricity already being about half the price of oil on a per kilometre basis (if charging overnight off peak). Highways? Super-quick battery swap is one option: super charge to 80% capacity in 25 minutes another. Trucks? Synfuels & Hydrogen & boron. Remember, when people started driving perambulating automobiles back in the day, every time they backfired or made a noise or broke down people yelled “Get a horse!” Cars were simply in the minority. For a while. EV’s are in a minority right now! So for a while I’ll let you yell “Get a horse!” (As long as you know that’s what you’re doing!)

14 03 2014
mikestasse

Highways?

EXACTLY.

14 03 2014
Lindsay

EV’s won’t help us. They’re just another product in the mass consumer society that got to this point to begin with. Manufacturing, shipping, maintaining a vehicle of any kind takes resources. Give the world’s 7 plus billion one each to drive and we’ll still need 3 planets. The All Hail EV’s worldview is a perpetuation of the idea that we can consume our way to a greener future.

14 03 2014
John P

This POV does not sit well with most people, so they will literally “tilt at windmills” to avoid it and by simply doing so end up making the problem worse and worse. The solution? More windmills!

14 03 2014
John P

I think the next two to three years could well see a swift collapse in the world economy, given the juxtaposition of global reality that stories such as this reveal and the inertia of human optimism generally. The later should still be good to keep the gyro of BAU upright until then, as it just has since 2008, although we are really hearing the screeching of the mechanism getting louder, as it starts to seize up. By then, to paraphrase Marc Faber, “you’d better have yourself a farm or a gun”.

15 03 2014
Maponos

Isn’t Royal Dutch Shell the largest oil super major in the world?

15 03 2014
mikestasse

Shell, I just found out, is ranked 7th largest in the world based on output in Mbls/day…
http://www.forbes.com/pictures/mef45edhmf/7-royal-dutch-shell-3-9-million-barrels-per-day-18/

I was actually surprised at a couple of them that sneaked in ahead of Shell actually…

18 03 2014
Maponos

Wonder if capex costs is increasing for NOC’s?

18 03 2014
mikestasse

What are NOC’s?

18 03 2014
Maponos

National Oil companies!

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