From Australia (LB): A slide in Australian producer SANTOS’ second quarter revenue has not dampened its upbeat assessment of the period, with the company highlighting its ability to increase production, cut capital expenditure and make continued progress on the $18.5bn GLNG project.
Sales revenue fell 19% year-on-year to $786mn on the back of lower oil prices, however the result was improved by higher domestic gas prices and a weaker Australian dollar.
Sales volumes of 15.7mmboe were 4% higher than the corresponding quarter while production of 14.3mmboe represented a 12% year-on-year jump.
On the development front, Santos said its flagship GLNG joint venture project on Queensland’s Curtis Island was on budget and progressing well ahead of first LNG around the end of the third quarter.
From Houston (BN): FMC TECHNOLOGIES’ (FTI) second-quarter 2015 earnings report provides further evidence of the ongoing industry slowdown due to oil prices’ falling to half what they were a year ago.
FTI reported 2Q revenue of $1.7bn, down 15% from a year ago, and focused blame on the U.S. shale slowdown for the decline. The 19,000-employee company said layoffs could approach 15% of the pre-slump workforce by the end of this year and will start hitting the subsea segment after first-round cutbacks focused onshore.
Subsea revenue fell 7% year-over-year to $1.2bn, and operating profit in the segment decreased 5% to $183.5mn.
CEO John Gremp said the company still expects subsea orders totaling $3bn this year and margins of 15% but said work continues to improve FTI’s business model and operating effectiveness to be ready for the next market upturn. Executives said a strong backlog will push the worst of the oil slump’s effects into 2017.
From Australia (LB): Australia is perfectly positioned to take advantage of a projected 40% increase in Asian liquefied natural gas demand by 2020, which will see the commodity overtake iron ore as the key driver of the country’s export growth, according to a new report by ANZ.
The report, titled ‘Australia’s Gas Industry: When Markets Collide’ focuses on Australia’s domestic gas market and explores Asia’s growing demand for LNG and the impact of that growth on the LNG market as a whole.
With a number of Australian LNG export projects set to come online in the next two years, ANZ projects Australia will rival Qatar as the world’s largest LNG exporter by 2018, with annual exports tripling in value from $18bn in 2014 to more than $50bn by 2020.
As a result, ANZ expects LNG will overtake iron ore as the key driver of Australia’s export growth by the end of 2016, brining significant long-lasting benefits for the economy including higher taxation receipts, petroleum resource rent taxes and state royalties.
ANZ found that more than $200bn of investment in Australian LNG projects since 2010 has already seen capacity more than double in last 10 years. With six LNG projects currently under development, including Shell’s Prelude (32/8) flng project, Australia’s export capacity is expected to reach 128mt/a by 2020.
LUNDIN PETROLEUM will expense post-tax exploration costs of approximately $14mn and recognise a net foreign exchange gain of approximately $28mn for Q2 2015.
Lundin said it will incur pre-tax exploration costs of approximately $61mn which will be offset by a tax credit of approximately $47mn.
The exploration costs mainly relate to an exploration well drilled in Norway during Q2 on the Morkel prospect in PL579 which was announced as an uncommercial oil discovery.
SUBSEA UK has launched an online portal to help subsea companies export their skills, technology and expertise to key oil and gas provinces around the world.
Susbea UK’s specially-developed portal, Global Business – is an exclusive on-line tool which provides regularly updated details on opportunities in over 20 countries.
Developed as a starting platform for companies looking to expand into international markets, the portal will allow users to access intensively-researched industry reports, market data, related news and events to help them pinpoint exactly where the opportunities are outside the UK.
Users will be given their own secure log-in details to research how to go about doing business in Central, North and South America, Europe, Africa and in Asia Pacific.
Global Business will also include a database of key contacts to help companies form the necessary partnerships required to break into new provinces and establish a presence in even the world’s most challenging markets.
From Australia (LB): Perth-headquartered WOODSIDE PETROLEUM has reported a fall in revenue for the second quarter of 2015, reflecting lower LNG output and reduced pricing.
Sales revenue for Q2 tipped in at $898mn, a 36.2% fall from $1.4bn achieved in the prior quarter.
The result was impacted by a 9.3% year-on-year drop in sales volumes to 19.5mmboe. Woodside attributed the fall to lower LNG production and associated condensate production, as well as the timing of shipments.
Production volumes decreased 7.8% on Q1 predominantly due to lower LNG volumes at Pluto (32/2) associated with a planned turnaround and lower LNG volumes at the North West Shelf project associated with an unplanned outage.
On a positive note, Woodside said Pluto’s first major shutdown was completed in 25 days, about 10 days ahead of schedule.
The company’s 2015 production target range of 86-94mboe, inclusive of Balnaves oil and Canadian pipeline natural gas production, remains unchanged.
OCEANEERING INTERNATIONAL’s results continued to slip in Q2. Revenues were down to $810mn in the period from $927mn in Q1, although they were up from $787mn in the same period a year earlier.
Net income was down to $65mn from $110mn in Q1, and down from $69mn in Q2 2014.
CEO Kevin McEvoy said, ‘Our operating results during the quarter surpassed what we had anticipated. This was attributable to performances from our rov and subsea projects segments.
‘ROV benefited from better-than-expected revenue per day on hire due to more
vessel work, and subsea projects profited from higher U.S. Gulf of Mexico demand for deepwater intervention and diving services.’
HELIX ENERGY SOLUTIONS made a net loss of $2.6mn in Q2, compared to net income of $19.6mn in Q1.
Owen Kratz, president and ceo of Helix, said, ‘Our second quarter results are indicative of overall weak industry conditions in the oilfield services sector.
‘Our well intervention business was negatively impacted this quarter by a longer than planned Q4000 regulatory dry-dock and customer delays on the H534; this was partially offset by increased utilisation in the North Sea, anchored by the Well Enhancer and the return to work of the Skandi Constructor.’
RTI, a company which has supplied titanium into the offshore industry, has been acquired by Alcoa.
Dawne Hickton, RTI’s ceo, said, ‘Innovation and scale are critical to winning in both the titanium and aerospace industries. Today’s vote shows our shareholders understand that RTI and Alcoa are a natural strategic fit and that, together, we will be better positioned to compete in the global marketplace.’
From Houston (BN): The turmoil at PETROBRAS and in Brazil continues, with a Petrobras board member blasting Brazilian energy policy and reports suggesting President Dilma Rousseff’s approval ratings are at new lows and impeachment a possibility.
Petrobras board member Roberto Castello Blanco, an economist and former CFO at mining giant Vale added to the board in a recent shakeup, told a seminar that political and governmental intervention in Brazil’s energy industry has been ‘disastrous.’
He said escaping from the current tangle of corruption prosecutions, exploding debt and declining world oil prices requires that the government ‘not get in the way.’
Analysts say Rousseff’s role overseeing Petrobras, and conviction of construction executives in a kickback scheme, is a factor in approval ratings that fell to 7% in a recent survey with more than 60% favouring impeachment.
In the United States, U.S. District Judge Jed Rakoff rejected Petrobras lawyers’ efforts to block a $98bn shareholder lawsuit led by pension funds claiming Petrobras executives accepted kickbacks from construction companies to inflate contracts, damaging share value.
Well-known subsea hand Mike Theobald continues to move around the world. Having most recently been with Woodside in Perth, Mike has now landed in Kuala Lumpur as head of operations excellence with Petronas. Mike previously had long stints with Aker Subsea and BP plus a shorter one with Maersk in Copenhagen.
Does this move count as crossing the division aisle? For non-UK folk, that means going from one political party to another. Iain Morrice who has spent most of the last decade working for Helix Energy Solutions, mainly in subsea well intervention, has jumped ship and joined Island Offshore as global business manager.
From the UK (SS): It has hardly ever been easy to work for BP. Those who think of the Macondo well blowout in 2010 as the worst moment in the company’s history are only partly correct.
There have been a number of other notable ‘bad’ events including a series of accidents at its Texas City refinery, the Alaska pipeline leak and the near sinking of the Thunder Horse production semi due to a ballasting error.
Many blame John Browne’s cost-saving strategy in the 1990’s which thinned out the workforce, dispersing a significant portion of the company’s experienced talent.
Amidst this mayhem, there have been a few shining lights and now one of them is about to be dimmed with the imminent retirement of David Brookes. Over nearly five decades in the industry, 35 of them with BP, Dave was a voice of reason, sanity and civility, although, like many others who were involved in pioneering projects, he was involved in controversy.
He was subsea project manager on the UK’s first deepwater (450m) development at Foinaven in the 1990’s where one of the first major issues of hydrogen embrittlement occurred, resulting in the need to recover and re-engineer duplex steel manifolds.
Dave subsequently became chief subsea and floater engineer in 2006 which brought a number of interesting responsibilities. At the time of the Thunder Horse near accident, he had to report to the BP board on events.
It was recounted that he told the board about this development in 2,000m of water with wells producing up to 50,000b/d which elicited the response ‘are we doing that?’ from a board member with obviously less than a full knowledge of BP’s operations. Priceless.
He has most recently been senior consultant to the company and was often seen dispensing wisdom at a variety of conferences and events. He is about to sail off – literally! – into the sunset.