In the past couple weeks, the world’s top five oil firms (BP, Chevron, ExxonMobil, Royal Dutch Shell and Total) reported combined losses of $53 billion for the second quarter. This week, BP announced it would cut production by the equivalent of a million barrels of oil per day until 2030 as part of a plan to reach “net zero” greenhouse emissions by mid-century. As the global pandemic continues to batter industries worldwide, it appears the coronavirus has sped up big oil’s shift to green.
The extraordinary growth in solar energy has been stopped in its tracks as a result of the global pandemic. Many new projects that would have made 2020 the largest growth year for the sector to date have been put on hold for the foreseeable future. Luckily, the stalled growth of the solar sector is just that – projects have simply been put on hold. As the world transitions to a new post-pandemic society, growth in solar power generation will resume its upward trajectory. While two decades of growth in the solar energy sector has been stunted by the coronavirus pandemic, the outlook for the future remains positive.
Oil majors around the world have begun to release their second quarter earnings and the results are dismal. Royal Dutch Shell reported a staggering $18 billion quarterly loss, Total reported an $8 billion loss, Chevron at $8 billion as well, and while much less severe than their peers, ConocoPhillips reported $1 billion in losses. More reports will be released in the coming days but the true effects of the global pandemic and price war are starting to show and it does not look great for the oil and gas industry.
Instead of a push towards renewable energy, the world should be focused on a push towards clean energy. Those two terms are often used interchangeably especially when green energy advocacy groups are pressuring policymakers to campaign for the use of wind, solar, and electric vehicles. But as the world pushes towards clean energy during the green revolution and begins the transition to renewables, we must ask ourselves: with the shift away from fossil fuels, what is the true cost of clean, green, renewable energy?
Chevron finally pulled the trigger with their unspent Anadarko money from last year, purchasing Noble Energy in an all stock deal for ~$13 billion. This acquisition ends a long drought of deals and puts Chevron back in the news almost two years after putting Anadarko in play and ultimately standing aside to let Occidental buy it. This also marks the largest transaction in the oil industry since the start of the global pandemic.
The cost to produce a barrel of oil varies throughout the world and impacts the determination of global benchmark prices. If only a portion of global supply is economic at current commodity prices, global demand will be what influences the price floor. Once inventories are drawn down, supply/demand economics will drive up the price of oil to ensure supply can meet demand. Be sure to check out the periodical below for an in depth analysis of the economic price to produce a barrel of oil around the world, and why global demand will be the driver for oil prices to set a $55-60/bbl floor for the foreseeable future.
During the OPEC+ meeting on Wednesday, members made the decision to uphold the agreed upon production cuts from their April meeting. With 107% compliance with output cuts in June and economies restarting worldwide causing oil demand to quickly pick up steam, most experts expected a reduction in the agreed upon 7.7 million barrel per day cut for August. Sometimes you just have to expect the unexpected.
At the end of March during the peak of the pandemic, the Federal Reserve was authorized to buy tens of billions of dollars in corporate bonds from the energy industry. These actions, paired with those taken by the Federal Government to save the oil and gas industry, were met with harsh criticism because the industry was struggling long before the global pandemic and seemed to simply be delaying the inevitable.
The SCOOP/STACK Basin | June 2020 Field Overview Ranking 6th in oil production and 3rd in natural gas production, the SCOOP/STACK play is one of the largest fields within the
California | June 2020 Field Overview California, with both onshore and offshore oil production, has been supplying the U.S. with petroleum products since the 19th century. Operations are primarily focused
Eagle Ford Basin | June 2020 Field Overview A heavy shale play, the Eagle Ford basin is located east of the Permian, stretching from Dallas to San Antonio. Primarily a
The Permian Basin | June 2020 Field Overview Located in West Texas, the Permian Basin has been producing oil for over 100 years. It leads the US in oil production
The Powder River Basin| June 2020 Field Overview The Powder River Basin, known for its coal deposits, is located in Southeast Montana and Northeast Wyoming. The basin is named so
The Marcellus Shale| June 2020 Field Overview The Marcellus Shale is the largest gas play onshore in the US. Located in the Northeast, it supplies the high demand markets along
The Bakken Shale| June 2020 Field Overview Named after Henry Bakken, the farmer who owned the land where oil was originally discovered, the Bakken Shale is located in North Dakota,
The DJ/Niobrara Basin| June 2020 Field Overview Located mainly in the Northeast of Colorado, the Denver-Julesburg Basin consists of five main oil-producing formations: Niobrara sections A-C, Codell, and Greenhorn. These
Three major blows were inflicted on U.S. pipelines in just a two day span. First, Dominion Energy and Duke Energy canceled the Atlantic Coast natural gas pipeline project on the same day the U.S. District Court for the District of Columbia ordered the Dakota Access pipeline to be shut and emptied. The following day, the U.S. Supreme Court ordered that construction of the long-delayed and once-resurrected Keystone XL project cannot begin. For it’s one, two, three strikes you’re out in this brutal, unforgiving game.
Hydrocarbons are the largest global energy source, and demand for them has been growing rapidly in the past decade. Unfortunately, that progress was stunted with the recent global pandemic that shut down economies and societies worldwide. As the world recovers from the coronavirus, hydrocarbons will be in high demand in order to fuel the progress of the human race. The final piece of our four part series on post-COVID oil demand will investigate the overall change in global oil demand in a post-COVID world.
The summer heat has brought plenty of excitement to the oil and gas industry. Feuding investment companies argue if oil demand will ever reach pre-pandemic levels, natural gas prices fall to 25 year lows, and one shale pioneer had to take a break from the heat and file for bankruptcy protection all while employment rates began to skyrocket.
Transportation allows people and ideas to move from place to place and is the backbone for advancing society. Unfortunately, the global pandemic has hindered the movement of people in the first half of 2020. As individuals begin to venture back out into the world, the transportation sector, and by association the consumption of hydrocarbons that fuel these vehicles, will be completely changed. Fear and social distancing guidelines will force individuals away from mass transit. Reduced options and capacity will force individuals away from air travel. Both will result in increased personal vehicle travel well into the future. Part three of our four part series on post-COVID oil demand will investigate the change in global oil demand for fuel used in personal transportation.