Offshore: New Project Pace Quickens
As the oil and gas industry comes out of the recent downturn, E&P companies are tempted to chase the rewards of higher oil prices by accelerating the sanctioning of new projects.However, haste can lead to less certainty of what the ultimate cost of any given project will be. Projects with high levels of so-called engineering definition are generally expected to remain within about 20% of the initial cost estimates, according to Rystad Energy.“For offshore operators, that means the expected variation for projects to be sanctioned during the period from 2019 to 2023 could be as high as $220
Resilient Market Spurs Aker Solutions's Earnings
Norwegian oil services company Aker Solutions reported strengthened earnings for the first quarter of 2018 as orders almost doubled from a year earlier amid increasing signs of a market recovery."We are seeing increasing signs of a market rebound as lower break-even costs and higher oil prices spur project sanctions, particularly in Norway," said Aker Solutions Chief Executive Officer Luis Araujo. "Our consistently strong execution and solid cost-efficiency improvements are supporting margins amid tough international competition."Orders totaled NOK 8.6 billion in the quarter
Subsea 7: Offer Could Change if McDermott Cooperates
said the bid for McDermott is a sign of industry consolidation that has to be monitored closely. The move comes after Schlumberger and Subsea started talks earlier this year to form a joint venture to deliver undersea installations and services. Oil firms have returned to profit thanks to higher oil prices and cost cuts made in the recent downturn, but their suppliers are still feeling the squeeze. Siem has long called for the industry to consolidate as a way of coping. "Siem doesn't care about the market share, but about the value ... He wouldn't do that (buy McDermott) if
Record-size US Offshore Oil Lease Sale Draws Modest Bidding
.S. government offers Gulf of Mexico leases annually, but usually in smaller regional batches. An auction in March 2017, for example, offered up 48 million acres in the Central Gulf of Mexico planning region. Consultancy Wood Mackenzie had expected demand for the acreage to get a boost from higher oil prices and lower corporate taxes, but pointed out interest could be hurt by competition from Latin America and concerns over the impact that U.S. tariffs on steel imports could have on costs. William Turner, senior research analyst at Wood Mackenzie, said the sales statistics were "on
Schlumberger, Subsea 7 Mull Oil Services JV
for oilfields. The news lifted Subsea 7 shares on hopes the talks could be the first step towards a full takeover, in a sector that has already seen consolidation with the 2016 merger of Technip and FMC Technologies. In recent months, oil firms have returned to profits due to higher oil prices and the benefits of deep cost cuts they made during the downturn. But their suppliers are still feeling the squeeze and trying to cope with low profitability. Since 2015 Schlumberger and Subsea 7 have collaborated for some of their work in designing, building and laying oil and gas
BP Deepwater Horizon Costs Balloon to $65 Billion
expected to reach $3 billion compared with a previous estimate of $2 billion. Although the settlements of claims in recent months were significantly higher, BP and analysts expect the latest charge to be fully manageable as BP is set to see a sharp increase in revenue this year thanks to higher oil prices. Still, there was a risk that the final bill could rise again, Brendan Warn, analyst at BMO Capital Markets said. "We note that the last few remaining claims are likely to be the most complex and sizeable, with this quarter's provision being evidence of that," Warn
February 2025
