ExxonMobil, Chevron, Total, Royal Dutch Shell, and British Petroleum are the five biggest players on the index, which includes 85 other majors. Together, they have lost $115 billion in market value since the beginning of April, Bloomberg reports, according to World Oil.
By Zainab Calcuttawala – Jul 04, 2017, 5:00 PM CDT
Operational improvements in shale and non-shale oil drilling, on top of lower expenses for oilfield services and access to pipeline capacity, have driven down the costs of producing the fossil fuel since the 2014 market crash. But the increase in output has forced barrel prices into a deeper bearish market, causing further damage to corporate bottom lines.
This trend is mapped clearly in the MSCI’s World Energy Index, which measures the progress of large and medium sized companies in 23 oil-producing countries on a quarterly basis. ExxonMobil, Chevron, Total, Royal Dutch Shell, and British Petroleum are the five biggest players on the index, which includes 85 other majors. Together, they have lost $115 billion in market value since the beginning of April, Bloomberg reports, according to World Oil.
The loss pattern isn’t consistent across the board, though. Chevron and Exxon reported strong Q1 2017 figures, beating expert expectations. Chevron took in$2.3 billion in the first quarter of this year, compared to a loss of $725 million in the same period in 2016. Its cash flow more than tripled to $3.9 billion. Exxon’s profits more than doubled to $4 billion in the first quarter, year-on-year.
With the OPEC cut locked in at 1.2 million barrels per day for the next nine months, energy investors do not have much to look forward to in terms of market-shifting changes to fundamentals.
Things seemed different at the end of 2016, however. In the months following OPEC’s cut extensions in November, the oil sector experienced the best Q1 growth in years. Soon, new production from low-hanging fruit in the Permian and Bakken formations in the U.S., along with a strong output recovery in Libya and Nigeria, buried the OPEC cuts that had been driving the barrel price surge.
Post-crash downsizing caused over 350,000 job losses, with oilfield services (OFS) companies taking the biggest hit, according to data from Houston’s Graves and Co. published last year. Since then, major energy markets, notably Texas, have begun rehiring workers at a snail’s pace. It seems the recovery will not be anything televise-able.
As the number of rigs in the Permian basin climbs, so does the demand and cost of securing essential oilfield services. Oil majors took to scrapping major projects and liquidating assets after the 2014 and 2016 price crashes to balance the books, giving the producers the upper hand in negotiating services contracts for their remaining projects. Now, OFS companies are taking their revenge, and it’s beginning to show.
S&P Global Platts predicts that OFS contracts will be 20 percent more expensive by the end of the year, partly because the best drilling spots have already been taken by the 900+ rigs already online across shale country. The slowdown in production showed on Friday, when Baker Hughes reported the first decline in active U.S. rigs in 24 weeks. The difference was only a single rig, but the end of the massive streak sent a clear message: prepare for a production plateau.
In short, there isn’t any leeway left in the oil price to sustain additional capacity while guaranteeing a profit and avoiding a deep dive in barrel prices. U.S. shale output can only go down from here.
By Zainab Calcuttawala for Oilprice.com
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
