|Bid||5,400.00 x 10000|
|Ask||5,400.00 x 29000|
|Day's Range||5,340.00 - 5,433.00|
|52 Week Range||3,663.00 - 6,810.00|
|Beta (5Y Monthly)||0.30|
|PE Ratio (TTM)||5.78|
|Earnings Date||Jun 03, 2020|
|Forward Dividend & Yield||700.00 (13.35%)|
|Ex-Dividend Date||Jul 09, 2020|
|1y Target Est||79.78|
Iraq has yet to inform its regular oil buyers of cuts to its exports, suggesting it is struggling to fully implement an OPEC deal with Russia and other producers on a record supply cut, traders and industry sources said. Less than full compliance by Iraq, as well as by smaller producers such as Nigeria and Angola, could hurt the OPEC+ group's efforts to cut output by 9.7 million barrels per day from May 1, equivalent to about 10% of world demand before the coronavirus crisis led to a slide in consumption and prices.
BASRA, Iraq/BAGHDAD, April 30 (Reuters) - Iraq will struggle to cut crude output a record 1 million barrels per day (bpd) or 23 % from May under OPEC's deal with Russia and other producers, and Baghdad has yet to agree with oil majors about where the cuts will come from, industry sources said. Majors such as BP, Exxon Mobil, Lukoil and Eni produce the lion’s share of Iraq’s output and have so far resisted calls for cuts, prompting Iraqi officials to review options such as asking the companies to bring forward field maintenance. Less than full compliance by Iraq could hurt the OPEC+ group's efforts to curtail supply by as much as 9.7 million bpd to support oil prices that have crashed along with fuel demand during the coronavirus outbreak.
Kazakhstan's biggest oil producer, Tengizchevroil (TCO), said on Monday its production operations "continue as normal" after a fresh case of the novel coronavirus was confirmed among the workers of one of its partner companies. TCO said last week it was temporarily reducing work on its $45 billion expansion project and suspending construction activities related to its base business to protect employees after the first coronavirus cases were confirmed among workers of its contractors. TCO, owned by Chevron, ExxonMobil, Russia's LUKOIL and Kazakhstan's KazMunayGaz, operates the giant Tengiz field in western Kazakhstan and accounts for a third of the country's total crude output.
(Bloomberg Opinion) -- For Lukoil PJSC’s billionaire shareholder, Leonid Fedun, Russia’s decision to sign up to the OPEC+ oil deal was akin to its signing of the 1918 Treaty of Brest-Litovsk, which dragged the country out of the First World War. Both were humiliating, but necessary, he implied. The alternative was far worse.Back in early March, Russia, with its strong foreign currency reserves and low-cost producers, had expected to ride out the misery of tumbling crude prices. Unable to extend an existing output reduction deal with its fellow oil exporters, it spied an opportunity to squeeze out those seen by Moscow as free riders: namely, the U.S. shale producers who benefited from others’ production restraint, only to flood the market with supply.In the end, though, the damage inflicted by the coronavirus lockdowns on oil demand was too great. The potential geopolitical gains from being seen to participate in a solution — and the losses from being seen to hamper one — were too significant. Storage was running out. Russia agreed to cut.The real challenge lies ahead. Saudi Arabia and Russia have said they will split the burden of the reductions, cutting 5 million barrels a day between them initially from a baseline set at 11 million. That’s half the total cuts agreed by the OPEC+ group (including the old OPEC nations and other producers). Yet Moscow’s concessions will mean far greater technical risks and future costs for its oil companies, which have had to become increasingly ingenious to keep mature fields alive. That means compliance with the deal’s targets looks trickier too.Russia could have coped for longer with rock-bottom prices. It has a rainy-day fund for just such times. Yet President Vladimir Putin needed to ease the economic pain from Covid-19 at home, and higher crude prices would help. He will also hope that participating in a deal that satisfies U.S. President Donald Trump may pay dividends elsewhere, say, in sanctions. Unfortunately, what makes sense at the virtual negotiating table isn’t always straightforward in practice.To hit its target for May and June’s cuts, Russia will need to remove 2.8 million barrels a day from its reported March liquids production levels. Even if you exclude gas condensate, the Oxford Institute for Energy Studies estimates that’s still 2 million barrels to be cut — one-fifth of the country’s crude production and double what commodities trader Trafigura estimated that Russia could concede, and what Moscow itself had indicated. It would take Russia back to production levels last seen in 2003.The difficulty isn’t cutting back. Indeed, that’s the easy bit. The trouble is that Russia’s mature fields account for some 80 percent of its production, and they aren’t easy to just turn off and on again. Cuts need to be made without hurting companies’ ability to ramp back up at a reasonable cost. Plus they’ll need to be delivered in a way that doesn’t make the remaining production uneconomic. Kirill Tachennikov, an analyst at BCS Global Markets, estimates that half of these fields aren’t technically equipped to easily alter supply. And that’s before considering other implications, such as local employment and changes to electricity consumption.The question, then, is how Russia’s commitment will be spread between producers, not all of them state-controlled. So far, Energy Minister Alexander Novak has said the companies agree that radical measures are needed, but there’s scant detail on how they’ll deliver them. Rosneft PJSC accounts for almost 40% of Russian production, but it may find it easier to argue its way out of some restrictions thanks to its crude production that’s pre-sold to China. Producers such as Tatneft PJSC, with a greater share of mature fields, will suffer more.There are some levers that Russian producers can pull: Turning more crude into profitable refined products, for example. There may be some room too for maneuver around the conversion between Russia’s official numbers, in metric tons, and the statistics in barrels per day. Vitaly Yermakov at the Oxford Institute for Energy Studies points out that much of Russian production, say from Eastern Siberia and Sakhalin, is of lighter oil, so that means producers get more barrels from their oil, which should make the cuts more manageable.There are some silver linings, too: The weather is warming, which may reduce some of the difficulties in making these changes to ice-bound facilities. The weaker rouble will also reduce costs and may protect future projects, as their cost in dollar terms come down. And at the best of times it’s hard for OPEC+ to monitor compliance, especially for pipeline exports.Avoiding short-term pain, though, looks impossible.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
In a market oversupplied with crude and related products, traders at big oil companies are focusing on placing their own production and refusing to deal with third party volumes as the cost of storage soars. Oil companies worldwide are scrambling to find a home for their output as they grapple with the fastest and deepest ever collapse in demand, with the coronavirus pandemic shuttering industry and keeping much of the world at home with little need to drive or fly, while both floating and inland storage is fast filling up. "We're instructed to focus on our group production as a priority and have to cut most of the trading activity due to the risks," a source with a European major said.
Those following along with PJSC LUKOIL (MCX:LKOH) will no doubt be intrigued by the recent purchase of shares by Vagit...
The CPC pipeline, essential to ship 1.4 million of light Caspian barrels per day (bpd) to the Mediterranean markets, is facing a shareholder standoff after its board was dissolved, potentially hitting further expansion plans, three sources said. The Caspian Pipeline Consortium (CPC), the largest privately-operated route connecting oil fields in Kazakhstan and Russia with the Black Sea, is co-owned by a number of shareholders with a history of failing to reach agreement. Disagreements between Russia's oil pipeline monopoly Transneft, Kazakhstan and other shareholders have capped expansion plans in the past.
(Bloomberg Opinion) -- It’s just become a lot harder to make long-term investment decisions in the oil industry. And no, I’m not talking about the need to transition to a low-carbon economy, or the backlash from climate activists and investors. Any veneer of certainty about the future path of oil prices has evaporated.This is the second time in six years that Saudi Arabia has embarked on a pump-at-will oil production policy that has hammered prices. Whether it’s aimed at Russia or the U.S. shale sector, producers everywhere — from OPEC members such as Angola to corporate behemoths like Exxon Mobil Corp. — have been warned that they can no longer count on the kingdom to keep a floor under oil prices. And that will impact decisions on future investments around the world.Even if the de facto leader of OPEC steps back from its threat to boost oil supply by more than 2.5 million barrels a day next month, which seems unlikely, Saudi Arabia has shown that it is willing to use its production capacity as a weapon — not to restrict supply and raise prices, but to boost it and crash them. That introduces a whole new challenge for would-be investors in oil projects that might have a lifespan of decades and even for those in the U.S. shale patch, where initial investments can be recouped much more quickly.Oil at $30 a barrel, or even at $20, won’t stop most fields that are already in production from pumping, no matter where they are. Some will certainly be in peril, but they are not the huge high-cost deep-water projects beneath the waters of the Atlantic Ocean or in the Arctic. The most vulnerable will be the so-called “stripper wells” in the U.S. that pump less than 15 barrels of crude a day. They accounted for 10% of all U.S. production in 2015, but their importance has diminished as production from shale deposits has boomed.As long as prices remain above the cost of getting the next barrel out of the ground — the lifting cost — wells already in operation will keep pumping. And those costs can be pretty low. Saudi Aramco, the monopoly oil producer in Saudi Arabia, boasts an extraction cost of about $2.80 a barrel, according to the prospectus for last year’s initial public offering of its shares. Russia’s oil companies are not far behind, with Rosneft PJSC, Gazprom Neft and Lukoil PJSC all reporting production costs below $4 a barrel. The supermajors including Exxon and Royal Dutch Shell Plc face higher bills, as the chart above shows. But even for them the cost of pumping oil and gas from fields already in production is below $15 a barrel before taxes. That suggests that there will be no rush to halt flows in the face of the Saudi surge.Even if prices do fall below lifting costs, the expense of shutting in a field may make it more economical to keep it running at a loss for a while in the hope that they pick up again, particularly as the cost of restarting production later may be prohibitively expensive.This has certainly been the practice in the past. When oil prices fell to about $10 a barrel in 1999, amid the Asian financial crisis, operations halted at just one small Greek oil field — Prinos — that was pumping just 1,600 barrels a day. In the U.K. sector of the North Sea, the operator of a minor field also threatened to stop producing, until it got a discount on the fee charged to pump its oil to shore through a shared pipeline.That’s not to say that some current output isn’t at risk if oil prices continue to fall. Projects in Canada face greater uncertainty than those elsewhere, with pre-tax operating costs of existing production around $20 a barrel. Outside of the U.S. stripper wells, this may be the first place to look for production being halted on economic grounds.Shale production will also be hit, as a slowdown in drilling and completion combines with steep decline rates at new wells. The Energy Information Administration cut its forecast for U.S. crude production in its latest Short-Term Energy Outlook, published last week. It now sees output peaking at 13.2 million barrels a day in April and pegs December 2020 production back where it was at the end of last year, hastening the end of the second shale boom.A geographical comparison from the annual reports of four major international oil companies shows that production costs in Russia were about $22 a barrel, including taxes, when oil prices were close to $70 a barrel. But Russia’s oil taxes are closely linked to prices.What will suffer across the board, however, is spending on maintaining flow rates of current production and investment in new projects. The impact of the former could be felt by the summer, if maintenance programs at offshore fields are scaled back. Decline rates in countries such as Angola could become even steeper and will accelerate again if nearby fields are not drilled and tied back to existing production infrastructure.But production costs mean little when it comes to deciding whether to invest in new capacity — even in Saudi Arabia. And it’s the aversion to new investments triggered by the price collapse that will have a much longer-term impact, potentially sending prices soaring again in the future. That will happen if capacity expansions in Saudi Arabia and other low-cost producing countries fail to keep pace with demand — demand that itself could get a boost from the same low prices — just as output declines elsewhere.Even if the kingdom backs away from its pump-at-will policy, as it did previously with the introduction of the OPEC+ output deal in 2016, the threat of a repeat will continue to hang over the industry. In a world where oil prices are driven down to $30 a barrel or lower every few years, investing in new production capacity becomes a much more difficult decision to take. The Saudi safety net, which the global oil industry has come to take for granted, has just been ripped away.To contact the author of this story: Julian Lee at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
To the annoyance of some shareholders, PJSC LUKOIL (MCX:LKOH) shares are down a considerable 32% in the last month...
OPEC and its Russia-led non-OPEC allies could push Brent Crude prices back to $60 a barrel if the coalition agrees to deepen the cuts by up to 1 million bpd
OPEC ministers are beginning to arrive to Vienna on Tuesday as the group debates whether to further reduce oil production to tackle deteriorating demand from the global spread of the new coronavirus. The Organization of the Petroleum Exporting Countries and allies led by Russia agreed in December a collective cut of 1.7 million barrels per day (bpd) to their supply until the end of this month. Saudi Arabia has been voluntarily cutting an additional 400,000 bpd, meaning OPEC+ is effectively curbing production by 2.1 million bpd.
OPEC's proposal to cut oil production by up to 1 million barrels a day would be enough to balance the oil market and lift prices to $60 a barrel, Leonid Fedun, vice-president of Russian oil producer Lukoil, told Reuters. The comments from Fedun, who was talking on the sidelines of the company's presentation of its low-carbon energy strategy, suggest Russia may be willing to agree to OPEC's proposals for more output cuts in light of the coronavirus outbreak. The Organization of the Petroleum Exporting Countries and its partners, a group known as OPEC+, will meet in Vienna on March 5-6 to discuss additional steps to support the oil market as the spread of the coronavirus risks hurting demand.
U.S. sanctions on Russian Rosneft's trading arm will disrupt a slice of global crude flows and may prompt refineries in Europe, India and the United States to shift purchases to other crude suppliers, traders said. The United States on Tuesday redoubled efforts to oust Venezuelan President Nicolas Maduro by barring U.S. dealings with Rosneft Trading S.A., a subsidiary of Russia's state oil major Rosneft, which Washington said provides him a financial lifeline. The ban will likely hit some U.S. direct purchases of Urals, typically a medium sour blend, from Rosneft Trading and could make it more difficult for refiners in Asia and Europe to buy from the firm.
KUALA LUMPUR/LONDON Nov 22 (Reuters) - With Saudi Aramco yet to name any major foreign investors in its upcoming share sale, Malaysia's state energy company Petronas decided to take a pass on Friday. Expectations that Aramco customers and allies around the world would take significant stakes in the company have so far not materialised, with the listing looking like it will be reliant on local retail and institutional investors. Aramco, which kicked off the share sale process on Nov. 3 after a series of false starts, declined to comment to Reuters on the lack of any named anchor investors in its listing so far.