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Big Oil’s Plan to Buy Into the Shale Boom

by Javier Blas: 21 March 2017, 10:26 GMT

Big Oil is muscling in on shale country.

Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp., are jumping into American shale with gusto, planning to spend a combined $10 billion this year, up from next to nothing only a few years ago.

The giants are gaining a foothold in West Texas with such projects as Bongo 76-43, a well which is being drilled 10,000 feet beneath the table-flat, sage-scented desert, and which then extends horizontally for a mile, blasting through rock to capture light crude from the sprawling Permian Basin.

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Saudi Aramco to Pay Shell $2.2 Billion in Refinery Breakup

by Javier Blas, Joe Carroll, and Margot Habiby: 7 March 2017

Saudi Arabian Oil Co. will pay Royal Dutch Shell Plc $2.2 billion including debt to finalize the breakup of a 19-year refining partnership known as Motiva Enterprises LLC.Saudi Aramco’s Saudi Refining unit will take full ownership of the Motiva Enterprises name and legal entity, including the largest refinery in the U.S. at Port Arthur in Texas, and 24 distribution terminals, according to a joint statement. Shell will take sole ownership of the Norco and Convent refineries in Louisiana and 11 distribution terminals.

Aramco will make a $2.2 billion balancing payment, split between debt and cash and subject to adjustments including working capital, Shell said in a separate statement. Aramco will assume almost all of Motiva’s $3.2 billion of net debt, including $1.5 billion of Shell’s share. A cash payment will cover the balance, Shell said. The arrangement will also take the Anglo-Dutch company closer to its target of selling $30 billion of assets in the three years to 2018.

“Motiva is a strong competitor among U.S. refiners, and we value this important link with the dynamic U.S. energy sector,” said Abdulaziz Al-Judaimi, senior vice president of Aramco’s downstream business. “Our intent is to continue providing Motiva with strong financial support as it transitions into a stand-alone downstream affiliate.”

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Shell expects to split Motiva assets with Saudi Aramco in Q2

Mon Feb 6, 2017

HOUSTON Shell Oil Co, the U.S. unit of Royal Dutch Shell Plc, said on Monday it expects to divide the refineries and other assets of the Motiva Enterprises [MOTIV.UL] joint venture with co-owner Saudi Aramco in the second quarter of 2017.

“We are pleased with the progress we have made to date, and anticipate completion of the transaction in Q2 2017,” Shell spokesman Ray Fisher said in an email. “The April 1 date is a target that the internal project teams are working toward.”

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Downstream keeps cash flowing to protect Shell’s dividend

EXTRACT

The latest disposal came on Sunday with the $820m sale of Shell’s stake in a Saudi Arabian petrochemicals joint venture to Saudi Basic Industries. This followed a $1.4bn withdrawal last month from the Showa Shell refining joint-venture in Japan. A further break-up is being negotiated with Saudi Aramco over their Motiva US refining JV.

Chemicals ‘growth engine’ at Shell despite Saudi divestment – company

23 January 2017 

LONDON (ICIS)–Royal Dutch Shell’s chemicals business will continue to be a “growth engine” for the company despite the $820m disposal in its Saudi joint venture with SABIC, a spokesperson for the UK-Netherlands energy major said on Monday.

Shell announced late on Sunday it was divesting its 50% stake at SADAF, a 37-year old joint venture with the Saudi petrochemicals major.

The SADAF joint venture, at Jubail Industrial City, has six petrochemical plants with a total output of more than 4m tonnes/year, according to Shell, including production plants of ethylene and styrene with output capacities of 366,000 tonnes/year and 400,000 tonnes/year, respectively, according to Shell’s 2015 financial report.  

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Shell continues evolution by parting with Saudi corporation

By Daniel J. Graeber: Jan. 23, 2017

Royal Dutch Shell said its move to sell off its share in a petrochemical joint venture with a Saudi partner is part of its effort to retool its regional focus.

Shell sold its stake in a joint venture effort to Saudi Basic Industries Corp. for $820 million in a move that solidifies the Dutch supermajor’s shifting priorities in the wake of last year’s acquisition of BG Group.

The agreement marks the end of a joint venture agreement that was set to expire in 2020.

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Sabic Buys Out Shell in Saudi Petrochemical for $820 Million

Saudi Basic Industries Corp., the Middle East’s biggest petrochemicals producer, agreed to buy out Royal Dutch Shell Plc’s 50 percent stake in a Saudi joint venture for $820 million.

The Saudi Petrochemical Co. venture, known as SADAF, is ending earlier than the planned 2020 expiration, the Hague-based Shell said in an e-mailed statement Sunday. SADAF in Jubail, Saudi Arabia, has six petrochemicals plants with total production of about 4 million metric tons a year, it said.

Shell’s acquisition of BG Group Plc last year has turned its attention to restructuring its business and focusing on existing assets, and is sending “mixed signals about its desired role” in the Middle East, Arab Petroleum Investments Corp., the investment banking arm of Organization of Arab Petroleum Exporting Countries, said in a report last week. Shell in 2015 ended plans to build a $6.5 billion petrochemical plant in Qatar and last year exited a natural gas exploration venture in Abu Dhabi.

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Saudi’s SABIC to acquire remaining 50 percent of Shell venture for $820 million

Saudi Basic Industries Corp (SABIC) 2010.SE has signed an agreement to acquire the 50 percent that it does not already own in its petrochemical venture with Shell Arabia, a unit of Royal Dutch Shell (RDSa.L), for $820 million, SABIC said on Sunday.

“As per the partnership agreement between the two companies that stipulates the right of SABIC to renew or end the partnership by the end of 2020…SABIC decided to acquire the full stake of Shell, which is 50 percent,” it said.

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Opec outflanked

By Ed Crooks of the Finacial Times: January 13, 2017

In the 1930s many newspapers carried impressively detailed diagrams showing France’s defences along the German border, described by Popular Mechanix and Inventions magazine as the “world’s greatest underground fortifications”. By the end of May 1940, Hitler had demonstrated that while the Maginot Line might indeed be an engineering marvel, it was also irrelevant, as his panzer divisions swept past it through Belgium and into France. Last year’s agreement between leading oil-producing countries to curb their output had something of the same feel about it this week.

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Oil Prices

Extracts from a weekly briefing by Ed Crooks: January 6, 2017

In our predictions for 2016, we were right that oil would end the year over $50 – modesty forbids me from mentioning which writer made that forecast – but missed that an agreement between Opec and non-Opec producers would be one of the factors underpinning the price. For 2017 Anjli Raval made the call, arguing that crude was again likely to end the year above $50, on the grounds that a lower price would still be too low to enable sufficient investment in production to meet demand.

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Shell Norco chemical plant malfunction triggers flaring

HOUSTON, Dec 18 2016 (Reuters) – A malfunction on Saturday triggered flaring at Royal Dutch Shell Plc’s Norco, Louisiana, chemical plant, said a Shell spokesman.

Shell’s Ray Fisher on Sunday declined to say which unit sustained the malfunction.

A source familiar with plant operations said the malfunction was in an olefins unit at the chemical plant.

The Shell chemical plant in Norco shares the safety flare system with the adjoining Motiva Enterprises refinery. Flaring from the chemical plant is sometimes thought to come from the refinery.

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Trump stance could complicate Saudi/Shell deal

By RUSSELL GOLD: Dec. 16, 2016 2:45 p.m. ET

The election of Donald Trump threatens to complicate efforts by Saudi Arabia’s national oil company to purchase refineries and expand its petrochemical footprint in the U.S.

Speaking in Louisiana earlier this month, he said: “We use refineries from other countries. The whole thing is just crazy. It’s crazy.”

That stance could complicate a continuing deal: Saudi Aramco and Royal Dutch Shell PLC are in talks to end a joint venture called Motiva Enterprises. The Saudi company, which is state owned and state controlled, has said it expects after negotiations are concluded to own the 603,000-barrel-a-day refinery in Port Arthur, Texas. Shell is expected to get two smaller refineries in Louisiana.

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screen-shot-2016-12-05-at-16-34-00 By The Motley Fool  Dec 5, 2016

Today I’m looking at the critical reasons to sell out of Royal Dutch Shell (LSE: RDSB).

A drop in the ocean

The oil sector’s major players breathed a huge sigh of relief last week after OPEC — responsible for four-tenths of the world’s oil supply — confounded the expectations of many and agreed to cut its output.

Saudi Arabia brokered a deal that will see production fall by 1.2m barrels per day, to 32.5m barrels beginning in January. The news prompted Brent oil to top the $55 per barrel marker for the first time since the summer of 2016.

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Leaner and meaner: U.S. shale greater threat to OPEC after oil price war

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By Catherine Ngai and Ernest Scheyder

NEW YORK/HOUSTON In a corner of the prolific Bakken shale play in North Dakota, oil companies can now pump crude at a price almost as low as that enjoyed by OPEC giants Iran and Iraq.

Until a few years ago it was unprofitable to produce oil from shale in the United States. The steep slide in costs could encourage more U.S. shale output if OPEC members cut supplies, undermining the producer group’s ability to boost prices. OPEC ministers meet Wednesday to weigh output cuts to end a two-year glut that has pressured global oil prices.

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OPEC agrees first output cut since 2008, Saudis to take ‘big hit’

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By Ahmad Ghaddar, Alex Lawler and Rania El Gamal | VIENNA

OPEC has agreed its first limit on oil output since 2008, sources in the producer group told Reuters, with Saudi Arabia accepting “a big hit” on its production and agreeing to arch-rival Iran freezing output at pre-sanctions levels.

Brent crude futures jumped 8 percent to more than $50 a barrel after Riyadh signaled it had finally reached a compromise with Iran after insisting in recent weeks that Tehran fully participate in any cut.

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Opec cuts neither dead nor alive

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By Ed Crooks November 28, 2016

Opec’s possible production cut is the oil market equivalent of Schrödinger’s cat: neither dead nor alive. When they met in Algiers in late September, Opec ministers agreed the need to reduce output, but left the allocation of the cuts between individual members to be finalised later. If they cannot agree on that, the deal will die. At their meeting in Vienna on Wednesday, the ministers will have to open the box, and we will find out whether or not the agreement is still breathing.

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OPEC makes last-ditch bid to save oil deal as tensions grow

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By Rania El Gamal and Alex Lawler | VIENNA

OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.

OPEC experts started a meeting in Vienna at 0900 GMT and were due to make recommendations to their ministers on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Nov. 30.

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Not dead yet

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By Ed Crooks: November 19, 2016

The last rites have been read over the Age of Oil a few times recently, but this week the International Energy Agency suggested there was still plenty of life left in it yet.

In its 2016 World Energy Outlook, the IEA argued that even if the Paris climate agreement were fully implemented, demand for oil would keep rising until at least 2040.

The message was reassuring for oil producers worried that “peak demand” might condemn them to stagnation or decline, or even put them out of business. There was colder comfort, however, in a warning from Wood Mackenzie that big oil companies risked being left behind in the transition to low-carbon energy.

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This bad news should encourage you to avoid Royal Dutch Shell plc!

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By The Motley Fool  Nov 7, 2016

Deal in danger

My bearish view on Royal Dutch Shell (LSE: RDSB) hasn’t improved over the weekend, either, following news of fresh bickering between OPEC members.

On Monday, OPEC’s Mohammed Barkindo was forced to deny that the wheels are not falling off its much-lauded supply freeze agreement, with the group’s secretary general announcing that all 14 member states remain committed to the deal.

But rumours that Saudi Arabia vowed late last week to raise its own production, should members fail to rubber-stamp the deal this month, negates any suggestion of cross-cartel unity. Some members like Iran have been exempted from cutting, or even holding, their own production, causing other group members to publicly call for similar exemptions. The political and economic ramifications of getting an agreement over the line are clearly colossal.

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Royal Dutch Shell: The Comeback Is Here

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Alpha Investor: Sunday Nov 6, 2016

Summary

  • Shell posted a massive turnaround in its bottom line last quarter on the back of an improved production profile, lower costs, and higher price realizations.
  • Shell’s financial improvement is set to continue going forward as upstream oil price realizations will continue to improve on the back of a positive demand-supply environment in the oil industry.
  • Oil demand has exceeded supply by 500,000 bpd this year and the trend will continue as the likes of Russia, Saudi Arabia, and the U.S. continue to reduce output.
  • Shell’s focus on lowering both operating and capital costs will allow it to attain break-even point even if oil prices remain at $50/barrel, which will also improve cash flow.

On Tuesday last week, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) reported impressive results for the third quarter. In fact, Shell was able to achieve a major turnaround in its bottom line performance, posting a profit of $1.4 billion as compared to a huge loss of $6.1 billion in the same quarter last year. This impressive turnaround in Shell’s bottom line was a result of an increase in production as compared to the prior-year period, driven by the acquisition of BG that led to a favorable production mix in the upstream segment.

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Oil majors join forces in climate push with renewable energy fund

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By Ron Bousso | LONDON

Top oil companies including Saudi Aramco and Shell are joining forces to create an investment fund to develop technologies to promote renewable energy, as they seek an active role in the fight against global warming, sources said.

The chief executives of seven oil and gas companies — BP, Eni, Repsol, Saudi Aramco, Royal Dutch Shell, Statoil and Total — will announce details of the fund and other steps to reduce greenhouse gases in London on Friday.

The sector faces mounting pressure to take an active role in the fight against global warming, and Friday’s event will coincide with the formal entry into force of the 2015 Paris Agreement to phase out man-made greenhouse gases in the second half of the century.

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Survival in the harsh conditions of the oil downturn

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By Ed Crooks: October 21, 2016

The mood at the Oil and Money conference in London, the big energy event of the week, was a case of mixed emotions: cheer over signs of a near-term pick-up in the market, and concern over longer-term threats to demand.

The headlines were made on Wednesday by a clash between two of the biggest names in energy: Khalid al-Falih, energy minister of Saudi Arabia, and Rex Tillerson, chief executive of ExxonMobil. In his keynote speech, Mr al-Falih warned of the risk of “a shortage of supply” in future years because of plunging investment in oil production. Speaking minutes later, Mr Tillerson suggested he did not expect a collapse in supplies, because US shale provided “enormous spare capacity” to meet rising demand.

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The global market is still awash with crude

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By Ed Crooks: 14 October 2016

As the new Nobel prize-winner for literature once put it, something is happening here. The successful IPO this week by a US exploration and production company, Extraction Oil & Gas, was the first in the sector since crude prices started to slide in the summer of 2014. Along with the slide in energy junk bond yields, and signs of a corresponding thaw in E&P junk bond issuance, which has been essentially frozen all year, it is clear evidence that investor confidence in the US oil industry is returning.

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Royal Dutch Shell: The Turnaround Will Continue

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screen-shot-2016-10-06-at-13-11-55Alpha Investor: 12 October 2016

Summary

Royal Dutch Shell shares have received a boost in the past month on the back of an improvement in oil prices, a trend that is likely to continue.

There was excess oil demand of 500,000 bpd in the third quarter as against supply due to production cuts across the globe and robust demand, leading to an inventory correction.

Oil prices will rise further as Saudi Arabia, Russia, and the U.S. are all intent on reducing the industry oversupply, which will lead to further inventory declines.

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Idemitsu and Showa Shell postpone merger amid founding family reservations, Iran-Saudi tensions

screen-shot-2016-10-13-at-10-14-31KYODO, STAFF REPORT: 13 October 2016:

Oil distributors Idemitsu Kosan Co. and Showa Shell Sekiyu K.K. have decided to postpone their planned April merger as Idemitsu has yet to gain consent for the deal from the founding family, sources close to the matter said Thursday.

Idemitsu, the nation’s second largest wholesaler, and Showa Shell, the fifth biggest, were expected to announce the decision later in the day, according to the sources.

Idemitsu and Showa Shell originally revealed a plan to merge in 2015. But the progress of the merger has become increasingly uncertain after Idemitsu founding members, who hold a 34 percent stake, enough to veto the merger, announced their opposition to the plan in June.

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FT Energy Source Weekly Briefing

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By Ed Crooks: October 7, 2016

Two international agreements have dominated the week’s energy news. Both have futures that are still shrouded in uncertainty, but are important landmarks if only because countries with widely diverging interests were able to come together and sign up to a shared course of action.

One was the Paris climate accord, which this week secured support from enough countries to come into force formally next month. The UN said 73 countries and the EU, accounting for more than 55 per cent of global greenhouse gas emissions, had ratified the agreement, crossing the thresholds set when the accord was adopted last December. More of the 195 countries that agreed the deal then are expected to join it formally in the coming weeks, months and years.

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Now could be the perfect time to sell Royal Dutch Shell plc

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By Royston Wild – Friday, 7 October, 2016

Stakeholders in fossil fuel goliath Royal Dutch Shell (LSE: RDSB) could be forgiven for breaking out the bubbly following the company’s recent share price detonation.

Shell saw its value gallop 28% higher during the third quarter, and the firm’s meteoric ascent may not be finished yet — indeed, the stock is within striking distance of July’s quarterly peak of £21.48 per share, the loftiest level since May 2015.

But while many momentum investors may be tempted to plough in, I reckon now could provide a terrific opportunity for investors to cash out.

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Iraq’s OPEC revolt shows Saudi-Iran oil deal fragility

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Iraq’s OPEC revolt shows Saudi-Iran oil deal fragility

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By Rania El Gamal and Alex Lawler | ALGIERS

For years, debates in the OPEC conference room were dominated by clashes between top producer Saudi Arabia and arch-rival Iran.

But as the two managed to find a rare compromise on Wednesday – with Riyadh softening its stance towards Tehran – a third OPEC superpower emerged.

Iraq overtook Iran as the group’s second-largest producer several years ago but kept its OPEC agenda fairly low-profile. On Wednesday, Baghdad finally made its presence felt.

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Saudi Arabia Injects $5.3 Billion in Bank System Amid Crunch

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The plunge in oil prices over the past two years forced the government to draw down on its deposits in the banking system…

By Alaa Shahine and Stefania Bianchi: 25 Sept 2016

Saudi Arabia’s central bank stepped up efforts to support lenders in the Arab world’s biggest economy as they grapple with the effects of low oil prices.

The Saudi Arabian Monetary Agency, as the central bank is known, said it decided to give banks about 20 billion riyals ($5.3 billion) in the form of time deposits “on behalf of government entities.” It’s also introducing seven-day and 28-day repurchase agreements, as part of its “supportive monetary policy.”

The plunge in oil prices over the past two years forced the government to draw down on its deposits in the banking system, squeezing domestic liquidity. That’s pushed up the three-month Saudi Interbank Offered Rate, a key benchmark used for pricing loans, to the highest level since 2009. The central bank was said to have offered lenders 15 billion riyals in short-term loans in June to help ease liquidity constraints.

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Shell and BP have lost billions – now the low price of crude is hurting other firms too

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By LAURA CHESTERS FOR THE DAILY MAIL19 September 2016

Oil is slowly climbing back to $50 a barrel as a deal between Saudi Arabia and Russia and an agreement on production in Venezuela helped to stabilise prices.

The production agreements could finally give some assurances to dozens of companies who have suffered since crude slumped from $114 a barrel in 2014 to $28 early this year.

Oil supermajors such as BP and Shell have been high-profile casualties, losing billions in profits.

They’ve written off billions of pounds and have had to slash tens of thousands of jobs as they change their businesses to cope with the reduced profits.

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SHELL: STRICTLY PRIVATE AND CONFIDENTIAL?

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EMAIL FROM JOHN DONOVAN TO SHELL: 15 SEPT 2016

From: John Donovan <[email protected]>

Subject: STRICTLY PRIVATE AND CONFIDENTIAL?

Date: 15 September 2016 at 12:51:41 BST

To: [email protected]

Cc: Michiel Brandjes <[email protected]>

To Mr. Gary P. Thomson SI-LSC/KCompany Secretarial Advisor 

Corporate Secretariat 

London 

Dear Mr. Thomson

Thank you for your email dated 26 July 2016 and your subsequent letter dated 30 August 2016, the content of both stated by you to be “Strictly private and confidential”.

An attachment was marked as being “Confidential”.

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Will Saudi Aramco Be Able To Lay Its Hands On Houston Refinery?

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By Tsvetana Paraskova – Sep 14, 2016, 3:52 PM CDT

At a time when U.S. and Saudi relations are strained, the Saudi Arabian Oil Company is reportedly leading in a race to buy a large refinery in Houston.

Certainly, politics and geopolitics cannot stay out of such move by the Saudi company, but it seems that Aramco has solid business reasons, as well as political ones, to bid for the Houston Refinery, which Dutch chemicals company LyondellBasell Industries NV (NYSE:LYB) is reportedly putting up for sale.

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No oil freeze yet

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Screen Shot 2016-06-20 at 08.25.29By Ed Crooks: September 9, 2016

“Grant me chastity and continence, but not yet,” St Augustine wrote in his Confessions, remembering his prayer as an adolescent. Opec members are taking much the same attitude to restraining their oil production.

Saudi Arabia and Russia, the world’s two largest crude producers, said on Monday they would co-operate on ways to stabilise oil prices, but stopped short of agreeing to freeze production. There will be a working group to study ways to curb price volatility, and co-operation on production curbs was held out as a possibility. But Khalid al-Falih, Saudi Arabia’s energy minister, was clearly in no hurry to make any commitments.

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Saudi Aramco-Motiva in lead to buy Lyondell’s Houston refinery: sources

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By Erwin Seba and Jessica Resnick-Ault | HOUSTON/NEW YORK

Saudi Aramco and its U.S. refining joint-venture Motiva Enterprises [MOTIV.UL] lead the race to buy LyondellBasell Industries Houston refinery, according to three sources familiar with the matter.

An announcement of the sale by Lyondell is expected this week, the sources said.

Lyondell spokesman Michael Waldron declined on Monday to discuss a sale of the refinery.

Reuters reported on Aug. 25 that Dutch chemical company Lyondell had retained Bank of America Merrill Lynch to help with a sale of the refinery.

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Why I’m expecting Royal Dutch Shell plc and BP plc to plummet!

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By Royston WildThe Motley Fool: Friday, 2 September, 2016

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Investor appetite for the oil segment has taken a knock in recent weeks as fears of a prolonged supply glut have weighed.

British majors Royal Dutch Shell(LSE: RDSB) and BP(LSE: BP) have seen their share prices slip 10% and 7% respectively during the past six weeks, for example. And I believe a sharper retracement could be just around the corner.

Stocks keep surging

Broker predictions that the oil market is set to balance later this year are being put under increased scrutiny as already-plentiful stockpiles continue to build.

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Speculation rises over Opec output freeze

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By Ed Crooks: September 2, 2016

Over the past month, the big stories in the oil market have been speculation about a possible production freeze from Opec, and the reality of rising activity in the US shale industry.

The rumours of Opec action have followed the pattern that has become wearingly familiar over the past couple of years, since the landmark meeting in November 2014 confirming that Saudi Arabia was not prepared to cut production to try to stabilise prices.

As the meeting – in this case, a gathering on the sidelines of the International Energy Forum in Algiers on September 26-28 – grows nearer, suggestions that a freeze will be discussed grow louder. Venezuela, which has the most urgent need for a higher oil price, sounds the most enthusiastic about curbing production. Other countries make supportive statements and agree to meet, without promising any action themselves.

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Motiva says Shell, Saudi Aramco to split assets on April 1, 2017

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By Erwin Seba | HOUSTON: Wed Aug 31, 2016

Motiva Enterprises LLC [MOTIV.UL] said on Tuesday the division of its U.S. refining assets between Royal Dutch Shell Plc (RDSa.L) and Saudi Aramco IPO-ARMO.SE would take place on April 1, 2017, months later than originally expected.

The two Motiva partners announced last March they would divide their 20-year-old joint venture. The split, according to sources, had been expected to take place this October after completion of negotiations between Shell and Saudi Aramco over the division of assets and compensation due the partners.

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Idemitsu founding family crosses a line with the Saudis

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HIROFUMI MATSUO, Nikkei senior staff writer

TOKYO — Idemitsu Kosan‘s founding family is treading on treacherous ground as it attempts to block a planned merger with Showa Shell Sekiyu.

The family’s opposition to the deal, struck last November, has baffled the rest of the Japanese oil industry and apparently riled Saudi Arabia, the world’s largest oil exporter. The future of Japan’s second-largest oil distributor hangs in the balance. 

Speculation about Saudi anger has swirled in the Japanese oil sector since the family’s stance came to light in late June. Saudi Arabian Oil Co., better known as Saudi Aramco, the kingdom’s state oil company, is Showa Shell’s No. 2 shareholder, after Royal Dutch Shell. The Saudi company intends to retain a stake in the new entity created through the Idemitsu-Showa Shell merger. Under the proposal, Idemitsu would buy Showa Shell shares held by Royal Dutch Shell.

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Reuters: Partial restart of Motiva Convent hydrocracker seen by year-end

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Aug 22 2016, 14:58 ET | By: Carl Surran, SA News Editor

Motiva Enterprises’ 235K bbl/day Convent, La., refinery plans a partial restart of the heavy oil hydrocracking unit by year-end, but full production is not expected to return before fall 2017 as repairs are made from the Aug. 11 fire, Reuters reports, citing Gulf Coast market sources.

In addition to extensive repairs required to return the 45K bbl/day hydrocracker, Motiva will revamp the unit during the shutdown for the planned linking of the Convent refinery with the company’s refinery in Norco, La., sometime next year, according to the report.

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Exxon, Motiva refineries continue reduced operations amid floods

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Thu Aug 18, 2016 5:18pm EDT

Exxon Mobil Corp and Motiva Enterprises refineries continued to operate at reduced levels amidst flood waters in southern Louisiana, sources familiar with operations at each refinery said on Thursday.

An Exxon spokeswoman said the Baton Rouge Complex, which includes a 502,500 bpd refinery, continued to operate on Thursday, but declined to discuss the level of production or the status of specific units. The Baton Rouge refinery is the fourth largest in the United States.

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Motiva Convent refinery fire out, HCU heavily damaged -sources

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Screen Shot 2016-08-11 at 22.04.57By Erwin Seba and Liz Hampton | HOUSTON: Thu Aug 11, 2016 6:41pm EDT

A blaze broke out on Thursday at Motiva Enterprises [MOTIV.UL] 235,000 barrel per day (bpd) Convent, Louisiana refinery, heavily damaging the structure of the heavy oil hydrocracker before being extinguished in the afternoon, sources familiar with plant operations said.

Motiva confirmed that the fire was extinguished and said there were no injuries.

Initial assessments by Motiva indicated that repairs to 45,000 bpd HCU, called the H-Oil unit, are expected to take between one and four months, the sources said. Little damage was seen to the unit’s reactors, they said.

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Exclusive: Iraq, oil companies agree to restart investment, boost output

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Exclusive: Iraq, oil companies agree to restart investment, boost output

BAGHDAD/BASRA – | BY AHMED RASHEED AND AREF MOHAMMED: Business | Thu Aug 11, 2016 7:05am EDT

Iraq has reached agreement with BP, Shell and Lukoil to restart stalled investment in oil fields the firms are developing, allowing projects that were halted this year to resume and crude production to increase in 2017, Iraqi oil officials said.

The agreements, reached in July and August, effectively delay to the second half of the year projects that the three companies had planned to carry out in the first half, which had been suspended because of low oil prices.

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European energy groups press on with multibillion-dollar disposals

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Andrew Ward, Energy Editor: August 7, 2016

Extracts relating to Shell…

Royal Dutch Shell says it is working on 17 potential disposals as it seeks to reassure investors that its target for $30bn of asset sales by 2018 is achievable.

This balancing act is especially tricky for Shell as disposals are crucial to reduce debts after its £35bn takeover of BG Group, completed in February.

“Shell is going to have to be flexible on price if it is to move forward with some of these deals,” said one energy banker. “They cannot just sit back and wait for oil prices to come back.”

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Idemitsu Family Buys Showa Shell Stake in Bid to Stop Merger

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By Tsuyoshi Inajima, Stephen Stapczynski and Shigeru Sato: August 3, 2016 — 7:09 AM BST Updated on August 3, 2016 — 8:37 AM BST

Idemitsu Kosan Co. founding family descendant Shosuke Idemitsu has begun buying up shares in rival Japanese oil refiner Showa Shell Sekiyu KK in a bid to block a proposed merger between the two companies.

The Idemitsu founder’s son purchased 400,000 Showa Shell shares and may buy more until his namesake company gives up on the deal, according to a statement distributed to reporters in Tokyo on Wednesday. Showa Shell rose as much as 12 percent to 1,014 yen, the biggest intraday gain in more than a year, and closed 3.8 percent higher. Idemitsu fell 3.9 percent to 1,984 yen.

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Oil Is Facing The Perfect Storm

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By Cassandra Legacy – Jul 14, 2016, 3:27 PM CDT

Since at least the end of 2014 there has been increasing uncertainty over oil prices, from whether so-called “Peak Oil” has already happened, to matters of EROI (or EROEI) values for current energy sources and for alternatives, to climate change and the phantasmatic 2oC warming limit, and the feasibility of shifting rapidly to renewables or sustainable sources of energy supply. Overall, it matters a great deal whether a reasonable time horizon to act is say 50 years, i.e. in the main the troubles that we are contemplating are taking place way past 2050, or if we are already in deep trouble and the timeframe to try and extricate ourselves is some 10 years. Answering this kind of question requires close attention to system boundary definitions and scrutinizing carefully any assumptions.

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US oil leadership questioned

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By Ed Crooks: 8 July 2016

The most eye-catching story of the week was the estimate from Rystad Energy that the US holds the world’s largest oil reserves. As the table in Rystad’s press release shows, that calculation relies heavily on “undiscovered fields” in the US that have yet be found. In terms of proved reserves in existing fields, Saudi Arabia still has more than twice as much oil as the US, according to Rystad’s estimates. John Kemp of Reuters discussed the meaning of the varying figures for Saudi Arabia’s reserves, concluding: “No-one really knows how much more oil can be recovered from beneath the Saudi desert and adjoining areas in the Gulf.”

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How the Breakup of Motiva Will Help Royal Dutch Shell plc (ADR) and Saudi Aramco

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By Staff Writer on Jul 5, 2016 at 9:04 am EST

Earlier in March, Saudi Aramco’s subsidiary, Saudi Refining, Inc (SRI) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A), announced to dissolve their fuel partnership, Motiva Enterprise. Due to contradictory interests, both the entities signed a letter of intent (LOI), showing the division of assets held under joint venture (JV).

However, the disbanded venture has stuck another blow as Shell is seeking up to $2 billion as a part of breakup from its giant refining enterprise. The hefty compensation is due to Saudi Aramco’s retention of a larger stake in the venture for almost two decades.

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US oil reserves surpass those of Saudi Arabia and Russia

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Anjli Raval, Oil and Gas Correspondent: July 4, 2016

The US holds more oil reserves than Saudi Arabia and Russia, the first time it has surpassed those held by the world’s biggest exporting nations, according to a new study.

The US shale boom was a factor behind the recent oil price collapse that toppled the Brent crude benchmark from a mid-2014 high of $115 a barrel to below $30 earlier this year.

FULL FT ARTICLE

Shell seeks $2 billion from Aramco in Motiva joint venture breakup

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LONDON/HOUSTON | BY RON BOUSSO AND ERWIN SEBA: Mon Jul 4, 2016 3:25pm BST

Royal Dutch Shell (RDSa.L) has asked Saudi Aramco for up to $2 billion (£1.5 billion) as part of the breakup of their giant Motiva Enterprises refining joint venture in the United States, the latest stumbling point in a partnership fraught with tension.

The payment would be compensation for the Saudi company retaining a larger share of the nearly two decade-old JV. Its split was announced in March and is expected to be completed in October but disagreements over the payment could postpone the final date, sources close to the talks told Reuters.

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Oil Is Still Heading to $10 a Barrel

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By A. Gary Shilling:JUNE 28, 2016 12:00 PM EDT

Back in February 2015, the price of West Texas Intermediate stood at about $52 per barrel, half of its 2014 peak. I argued then that a renewed decline was coming that could drive it below $20, a scenario regarded by oil bulls as unthinkable. But prices did fall further, dropping all the way to a low of $26 in February. Since then, crude rallied to spend several weeks flirting with $50 per barrel, a level not seen since last year. But it won’t last; I’m sticking to my call for prices to decline anew to $10 to $20 per barrel.

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