$70 Oil Threatens Big Oil Projects

$70 Oil Threatens Big Oil Projects

Big Oil’s prized projects won’t face major cuts unless oil prices fall below $70 a barrel, BP’s chief financial officer told investors.
“We’re not expecting to adjust capital expenditures in response to oil prices,” Fuel Fix cited BP CFO Brian Gilvary as saying in a conference call. “That would put in peril the future growth. The balance sheet could more than comfortably handle $80 a barrel.” Sinking oil prices have put oil company investors and suppliers on watch for any signs that they’ll trim spending next year. So far, BP isn’t making any big plans to cut spending because of oil prices, Gilvary said.
“Where we have room at the margins to pare back or reface spend without compromising future growth, we will do so,” he said. “Relative to current guidance, I expect this could make a difference of $1 to $2 billion in 2015, with lower spend in the downstream following the completion of the Whiting refinery project.”
$70 Oil
It was the first word from the international oil majors, and it came a day after Goldman Sachs forecasted oil prices would fall to $70 a barrel in the second quarter of 2015 as supply outpaces global demand.
Next year, Gilvary said, BP is planning to focus on streamlining activity, continuing a process that began some 18 months ago as BP has sought to rein in costs and resize its businesses.
Gilvary said a $1 billion to $2 billion downward revision in 2014 spending wasn’t a result of planning for lower oil prices.
 “Our industry tends to be self-correcting, so one would expect some deflation if current oil prices remain low. We have a lot of flexibility to deal with a sustained period of lower oil prices.”
Sliding Profits
BP’s third-quarter profits fell 63 percent as the Russian ruble’s value dropped significantly against the dollar and lower Russian crude prices sank earnings from its stake in state-owned Rosneft.
The London oil giant collected a profit of $1.26 billion, or 42 cents a share, in the July-September period, compared to $3.5 billion, or $1.11 a share, in the same three months last year. Revenues declined from $98.2 billion to $94.8 billion. BP boosted its quarterly dividend, to be paid in December, by 10 cents.
BP’s third-quarter daily oil production dipped less than 1 percent to 3.15 million barrels of oil equivalent, as a seven-decade oil production pact with international oil companies ended in Abu Dhabi earlier this year. BP’s upstream profits fell 20 percent.


Short URL : http://goo.gl/J4b3Qa

You can also read ...

IOOC to Raise Crude Output
The Iranian Offshore Oil Company, a subsidiary of the National...
Oil Majors to Gain Clarity on Anti-Russia Sanctions
The Italian oil major Eni will discuss sanctions against...
Russia, Ukraine to Discuss Latest Gas Dispute
Ukraine’s state-held gas company Naftogaz and Russia’s gas...
Pasargad Energy Development Company will be commissioned to drill 126 wells in Jofeir and Sepehr fields.
In line with policies to help expand domestic companies' scope...
The California state court is seen as more favorable to the cities and counties.
California cities and counties seeking to hold five of the...
No Plan to Increase Oil Production in Next 12 Months
Iran does not intend to increase crude output in the next...
Brent, WTI Crude Futures Hit Highest in Two Weeks
Oil prices jumped on Friday, with Brent crude futures hitting...
Iraq Seeks Investors to Build Refinery
Iraq is inviting companies to bid for building a 70,000-bpd...