NG: Oil prices dip amid concerns in U.S., China, others
OIL prices dropped on Friday as traders sat tight before U.S. employment figures and following recent gains spurred by positive economic data in energy guzzlers – the United States and China.
Prices have won support in recent days also on growing concerns about supply disruptions in the Middle East and Africa, traders said.
Brent North Sea crude for delivery in September fell 16 cents to $109.38 a barrel.
New York's main contract, West Texas Intermediate for September, shed 11 cents to $107.79 a barrel.
"Crude oil prices slid lower... due to some profit taking as investors remain cautious ahead of the release (Friday) of the important U.S. non-farm payroll data," said Myrto Sokou, a senior research analyst at Sucden brokers.
"Brent fell slightly after surging above the $110 level yesterday for the first time since April 2013, showing strong upside momentum after robust PMI manufacturing data from the US and eurozone," she added.
China's official PMI also showed a surprise increase -- a rare piece of positive economic data from the Asian economic power, which has been slowing in recent months.
ASSESSED pangs of unsavoury business environment in Nigeria may have hit the bottom line of Royal Dutch Shell, leading to a decline in the company’s global turnover in second quarter of 2012.
The oil giant said in its second quarter 2013 report yesterday, that its underlying Current Cost of Supply (CCS) earnings were $4.6 billion for the quarter, representing a 21 per cent decrease in CCS earnings per share from the second quarter of 2012.
Shell said its results were undermined by a number of factors – but they were clearly disappointing.
Chairman of the company, Peter Voser, said in a statement, that oil theft and disruptions to gas supplies in Nigeria were causing widespread environmental damage, and could cost the Nigerian government $12 billion in lost revenues per year.
Besides, Voser said high exploration charges, adverse currency exchange rate effects and unabating security challenges assailed its operates in Nigeria, imparting on the company’s global earnings.
“We will play our part, but these are problems Shell cannot solve alone. Our cash flow pays for Shell’s dividends and investment in new projects to ensure affordable and reliable energy supplies for our customers, and to add value for our shareholders.
“Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line. These results were undermined by a number of factors – but they were clearly disappointing for Shell“, Voser said.
He said that the company made substantial improvements to its portfolio in the last few years.
“Today, Shell is rich with new investment opportunities and is capital constrained – the opposite position to where the company was in the middle of the last decade.
“Shell is investing in new capacity worldwide, to generate profitable growth for shareholders. In the next 18 months we expect to see five major project start-ups, which should add over $4 billion to our 2015 cash flow.
“ We’ve embedded rigorous portfolio management into Shell, to improve our capital efficiency and refresh the portfolio for growth. We have completed some $21 billion of divestments in the last three years and some $4 billion in the last 12 months alone, with more to come,” he added. He disclosed that the company is entering a new phase of more substantial portfolio change, which will lead to a higher rate of divestments in the coming years.
According to him, the company recently launched strategic portfolio reviews in both Nigeria onshore and North America resources plays, which will lead to further focus and divestments there, as Shell continues to shape the company for the future.
He noted that Shell’s strategy is to deliver sustainable growth in cash generation through the business cycle, underpinning competitive dividends and returns.
“We are not targeting oil and gas production volumes; rather we are focusing on financial performance.”
“Shell’s sustained investment in new growth projects will drive our financial performance. Dividends are Shell’s main route for returning cash to shareholders and we have distributed more than $11 billion of dividends in the last 12 months. So far this year, we have repurchased more than $3 billion of shares, and we are on track for $4 billion to $5 billion of share buy-backs in 2013. This underlines our commitment to shareholder returns,” he said.
