More Woes for Schlumberger

Less spending on oil and gas exploration taking its toll on one of the sector's largest companies.

Schlumberger Revenue Takes Nose Dive

HOUSTON, April 22 (UPI) -- Schlumberger, the largest oil field services company in the world, said its first quarter revenue experienced one of its sharpest declines since 2014.

The company said revenue through March 31 was $6.5 billion, a 16 percent drop from the previous quarter and 36 percent lower year-on-year.

Chairman and CEO Paal Kibsgaard said in a statement the sequential decrease was one of the largest since crude oil prices started moving sharply lower near the end of 2014.

"This was driven by a continuing drop in activity and persistent pricing pressure throughout our global operations as well as from project delays, job cancellations and activity disruptions," he said.

Lower crude oil prices, off about 60 percent from the 2014 highs, have left energy companies with less capital to invest in exploration and production activity, the side of the industry companies like Schlumberger serve.

In North America alone, Kibsgaard said the inland rig count was about 80 percent lower than it was in October 2014. First quarter revenue for Schlumberger in North America was $1.5 billion, a 25 percent decline from fourth quarter 2014.

Last month, Kibsgaard told industry leaders at an energy conference in New Orleanscorporate evolution from the services sector may be a necessity. Project performance, he said, can only be improved by leaving the downturn behind and adopting a new approach "based on collaboration and commercial alignment between the operators and the largest service companies."

In its quarterly statement, Schlumberger outlined details of three separate mergers during the first quarter, including the $1.24 billion deal with its smaller industry counterpart Cameron International Corp.

Looking forward, Kibsgaard said he expected spending cuts in exploration and production would be sharper than previously expected, even though there's been a recovery in crude oil prices he said was triggered by supply disruptions, like last weekend's strike in Kuwait, and talks of a production freeze among major oil states.

"We will continue to tailor costs and resources to activity, while remaining cautious in adding back capacity given the unpredictable nature of the current market," he said.

Education of Women Key To Advancing Human Condition

 

 

Why Organized Religion Fears Educated Women

Educating women improves the welfare of families as they become empowered to contribute to the financial success of their household—which in turn creates more opportunities and resources available for their children.  

For thousands of years women have been defined only in correlation to their relationship to men. They have been kept hidden, prohibited from speaking, forced into submission and treated as the “unclean” gender whose existence is that of mental and physical servitude to her human counterpart. Why has so much emphasis been placed upon the mind and actions of women? What does organized religion fear about the mind of an educated and logically-thinking woman?

Here are 5 reasons why organized religion fears educated women:

The Loss of Patriarchal Control

It is a widely-known fact that the more educated and financially stable a woman becomes, the more likely she is to practice family-planning and have her children at a later age. Educated women are also more likely to have fewer children than their uneducated and impoverished female counterparts.

Furthermore, educated women are more likely to cultivate their own worldview, rather than simply following their traditional familiar teachings; and may contribute no followers to a religion when they do finally decide to start a family.

This is a problem for religion because women who choose the timing and size of their household don’t typically contribute the same amount of future-followers to a religion as those women who are restricted from pursuing an education and career. If a woman leaves the religion altogether as a direct result of becoming well-informed and financially stable and no longer needs the “comforts” that her religion once provided, she has not only removed herself from the ranks, but her children as well. For religion to perpetuate itself, it must have followers, or it ceases to exist.

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Harvard Study: Now Methane Causes Worse Impact on Climate

 

WHO BATS LAST?

That’s why last month’s Harvard study came as such a shock. It used satellite data from across the country over a span of more than a decade to demonstrate that US methane emissions had spiked 30 percent since 2002. The EPA had been insisting throughout that period that methane emissions were actually falling, but it was clearly wrong—on a massive scale. In fact, emissions “are substantially higher than we’ve understood,” EPA Administrator Gina McCarthy admitted in early March.

THE NATION

Global Warming’s Terrifying 

New Chemistry

Our leaders thought fracking would save our climate. They were wrong. Very wrong.

By Bill McKibben 

Global warming is, in the end, not about the noisy political battles here on the planet’s surface. It actually happens in constant, silent interactions in the atmosphere, where the molecular structure of certain gases traps heat that would otherwise radiate back out to space. If you get the chemistry wrong, it doesn’t matter how many landmark climate agreements you sign or how many speeches you give. And it appears the United States may have gotten the chemistry wrong. Really wrong.   

There’s one greenhouse gas everyone knows about: carbon dioxide, which is what you get when you burn fossil fuels. We talk about a “price on carbon” or argue about a carbon tax; our leaders boast about modest “carbon reductions.” But in the last few weeks, CO2’s nasty little brother has gotten some serious press. Meet methane, otherwise known as CH4.

READ MORE 

Invisible Hand Defeated OPEC Cartel?

No-Brainer Production Freeze Ends Mindlessly

By Art Berman

The production freeze meeting in Doha was a no-brainer but it ended mindlessly with no action taken.

OPEC plus Russia and Mexico met yesterday to agree to do almost nothing by freezing production. Instead, they agreed to do absolutely nothing leaving everyone wondering why they even held the meeting.

All that they had to do was agree not to increase oil production above levels in January. They could have modified that to current levels. Probably, that would have ensured that oil prices remain near currently inflated levels that were created mostly by expectation of a production-freeze agreement to begin with.

It should have been a no-brainer because the Doha group’s production is already 130,000 barrels per day less than it was in January (Figure 1). Kuwait, Qatar, Russia, Mexico, Ecuador and Indonesia are all producing slightly more than they were in January but were prepared to go back to those levels.

Figure 1. Doha participants March vs. January 2016 crude oil production. Source: EIA and Labyrinth Consulting Services, Inc.

Iran is producing about 350,000 bpd more than in January and has stated its intent to raise output much higher. Everyone else is producing less or the same as in January.

But this has been clear for months. Iran called the idea of a production freeze “ridiculous”  in February and did not even send a representative to the meeting in Doha.

So, what was the point of the meeting?

READ THE REST ON FORBES

Peak Oil Today - 18 April 2016

"PEAK OIL TODAY"

The End Of Fossil Energy 

The very best weekly analysis and evaluation of the global peak oil situation with additional briefings, charts and videos, added by the curator from accredited professional sources, to enhance the informed investor's knowledge and understanding of its deep complexities and evolving outlooks. 

Everyone should "Bookmark ' this very important weekly post to stay abreast of this most critical aspect of global economics and life on this planet.

 

Peak Oil Review – 18 April 2016 

By Tom Whipple

Quote of the Week

"Wells Fargo’s foray into oil shows how Wall Street misjudged the risks hidden in an esoteric type of energy financing long thought to be bulletproof.”

Asjylyn Loder, Bloomberg News

   

Contents

1.  Oil and the Global Economy

2.  The Middle East & North Africa

3.  China

4.  Russia/Ukraine

5. The Briefs

1.  Oil and the Global Economy 

Oil prices climbed to recent highs early last week on hopes that the Doha meeting would eventually lead to some sort of production cut, a weaker dollar, and scattered production problems. Later in the week prices fell as the US crude glut continued to grow and expectations that something meaningful would come from the Doha meeting subsided. At week’s end, New York oil was at $40.36 and London at $43.10 up 2.8 percent for the week.

As many had predicted, the meeting in Doha on Sunday to freeze oil prices ended without an agreement. Even with the deal watered down to only last six months, the rivalry between Iran and the Saudis was too much for an agreement to reached.  Some commentators believed that a minimum some sort of face-saving agreement would have been contrived, but even this did not happen. From now on oil price movements may be based more on fundamentals and less on wishful thinking about a nearly meaningless production freeze.

Last week, the IEA, EIA, and OPEC issued their prognostications as to what was going to happen to oil production and prices in coming months. There is clearly considerable disagreement about the immediate future. The IEA has become the most optimistic, saying that the oversupply of oil which currently is about 1.5 million b/d will shrink to 200,000 b/d in the third and fourth quarters of 2016 thereby nearly eliminating surplus production. The Agency sees much of this decline in production coming from the US shale oil industry. This assessment is a shift in outlook, as a few weeks back the IEA was expecting overproduction to extend well into 2017. The agency remains confident that world oil consumption will increase by 1.2 million b/d this year.

Other observers are not so sure that overproduction will shrink rapidly as the IEA is forecasting in the next six months.  OPEC now sees global demand for oil as being less than previously thought. This is in line with an IMF projection that world economic activity will contract during the remainder of the year. OPEC says that its production will remain about the same for the remainder of the year, but that non-OPEC production will slip by 730,000 b/d during 2016.  This is clearly a considerably smaller drop than the IEA is talking about. The EIA, in Washington, projects that US crude production which averaged 9.4 million b/d in 2015, will now come in at 8.6 million in 2016 and 8.0 million in 2017. The Administration’s recent numbers currently put US production just below 9 million b/d.

New numbers from South Dakota released last week show crude production falling by only 4,000 b/d from January to February and that the state still has a backlog of some 900 wells that have been drilled and not yet completed. Oil producers in the state could continue without much of a drop in production just by completing already drilled wells along with a minimal amount of new drilling in sweet spots using the 29 drill rigs still in operation. The issue of just how fast US shale oil production will drop is still open. Deepwater production in the Gulf is expected to continue growing as drillers complete wells started years ago in which they have too much invested to delay production.

The US shale oil industry, however, does not seem to be as impressed as speculators by the recent increase in prices and continues to reduce the number of rigs in operation. Much of this is due to serious financial problems. Hardly a day goes by now without a declaration of bankruptcy by a company in the US oil business. Many of these companies are billions in debt and have little hope of drilling themselves out of their problem unless oil prices return to record levels well above $100 a barrel. US bank earnings started to come out last week, and they are mostly down due to writing off billions in loans to oil companies that are now bankrupt. Numerous shale oil drillers have had their lines of credit sharply curtailed or subjected to harsh regulation by their bankers who are tiring of pouring money into losing operations with little prospect of profitability.

In recent weeks, large numbers of oil tankers have been noted accumulating in unprecedented numbers just off of many major oil ports. Some of these tankers, such as those off Basra, Iraq, are waiting to load, but more oil is now being produced than the port facilities can handle, especially in bad weather. Off several Chinese oil ports, many tankers have been waiting for weeks for a chance to unload due to the boom in oil imports by China’s small independent refiners.

In other places, oil that has already been sold profitability on the futures market is simply being stored aboard tankers until in is time for delivery. The final reason for the long lines of waiting tankers is that the onshore terminals are nearing capacity and that oil must be shifted around to make room for incoming shipments. Whatever the reason, anchored crude carriers are very expensive propositions and a few weeks’ delay in unloading can easily erase any profit the owners had hoped to make from the voyage. In the last two months, similar accumulations of an unusually large numbers of tankers have been reported off Rotterdam, Houston, and Venezuela. This situation may be another sign that some of the overproduction of oil that is taking place in the world is, for the time being, simply ending up sitting on oil tankers longer than usual.

There is clearly much confusion as to where oil prices, production, and consumption are going in the next year. Optimists are saying the oil price plunge of the last two years is now over and that the markets will rebalance before the end of the year. Pessimists still foresee the possibility that the overproduction of crude, now put at circa 1.5 million b/d, will continue into next year. They note that the oversupply is reported as increasing in March. Some see recent indications that China’s economy could be bottoming out as a hopeful sign of better economic growth ahead and some are talking of a major economic disaster in the coming year.