PETROLEUM INDUSTRY AND TRADE – AUSTRALIA

Santos sticks to gas, earmarking $1bn for Narrabri development

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Original article by Perry Williams
The Australian – Page: 16 : 2-Dec-20

Santos CEO Kevin Gallagher says the oil and gas producer will not diversify into renewable energy or electricity generation. He contends that global demand for fuels will remain strong for a long time, while gas will play a major role in reducing carbon emissions over coming decades. Meanwhile, Santos expects to make a final investment decision on its Narrabri gas project in the first half of 2023, with the first phase of its development slated to cost $US650m. Santos has also advised that its Barossa LNG project will cost significantly less to develop than initially forecast.

CORPORATES
SANTOS LIMITED – ASX STO

More pain for BP after decision to shut Kwinana refinery

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Original article by Perry Williams, Nick Evans
The Australian – Page: Online : 2-Nov-20

Energy Minister Angus Taylor will hold meetings with the operators of the three remaining oil refinery operators in the week beginning 2 November. This follows the announcement by BP on 30 October that it plans to close its Kwinana refinery in Western Australia, with Taylor’s meetings coming amid fears that Australia’s entire oil refining industry could be gone within 12 months. The three remaining refineries are located at Lytton in Brisbane, and at Geelong and Altona in Victoria, and are operated by Ampol, Viva Energy and ExxonMobil respectively. The closure of Kwinana will see 600 people lose their jobs, while BP is in the process of shedding around 200 additional jobs, most of which are office roles.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES, BP PLC, AMPOL LIMITED – ALD, VIVA ENERGY GROUP LIMITED – ASX VEA, EXXONMOBIL AUSTRALIA PTY LTD

Future of refinery hangs in balance

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 19 : 15-Oct-20

Viva Energy’s Geelong refinery in Victoria has posted a loss of $30m for the September quarter, following a loss of nearly $50m in the first half of 2020. Viva will seek to boost cash flow at the refinery by reducing or deferring non-essential spending at the plant. The federal government’s $2.5 billion fuel security package may be crucial to the future of the refinery. Viva will provide an update on the outlook for the plant in December.

CORPORATES
VIVA ENERGY GROUP LIMITED – ASX VEA

Aussie gas spurs Shell’s $12bn hit

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Original article by Perry Williams
The Australian – Page: 13 & 19 : 1-Jul-20

Macquarie expects more companies in Australia’s energy sector to announce writedowns in the second half of 2020, in the wake of the sharp fall in the crude oil price. Global energy giant Shell has advised of impairment charges of up to $US22bn; this includes a writedown of between $US8bn and $US9bn on its gas business, primarily due to its gas projects in Australia. The price of Brent crude is trading at around $US40 a barrel, and Macquarie notes that Australian energy producers typically use a price of $US70 to $US75 a barrel for impairment testing purposes.

CORPORATES
ROYAL DUTCH SHELL PLC, SHELL COMPANY OF AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG

Santos warns of sovereign risk in energy sector

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Original article by Perry Williams
The Australian – Page: 16 : 20-May-20

Santos CEO Kevin Gallagher has stressed the need for Australia to create the ‘right investment environment’ to attract new capital in the post-coronavirus world. He has urged governments to ensure a free market environment for the nation’s energy producers so they are globally competitive. Gallagher has also expressed concern that increased sovereign risk in Australia has contributed to moves by major international producers to divest their local assets.

CORPORATES
SANTOS LIMITED – ASX STO

Caltex investors back Ampol rebirth

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 19 : 15-May-20

Some 99.8 per cent of Caltex Australia’s shareholders have supported a resolution to change its name to Ampol. The company aims to complete the rebranding of its petrol stations by the end of 2022. Caltex’s interim CEO Matt Halliday has noted the impact of coronavirus-induced travel restrictions; he says that convenience retail fuel volumes fell 16 per cent year-on-year in the 12 months to April, while demand for jet fuel has fallen by up to 90 per cent. Caltex is still looking to sell a 49 per cent stake in a portfolio of petrol stations, via an IPO or a trade sale.

CORPORATES
CALTEX AUSTRALIA LIMITED – ASX CTX

Energy companies face huge asset writedowns

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Original article by Perry Williams
The Australian – Page: 13 & 14 : 20-Apr-20

The price of Brent crude oil is trading at around $US28 a barrel. Energy industry sources have warned that Australian oil and gas producers may have to announce significant full or half-year impairment charges if the oil price remains subdued for the remainder of 2020. Allan Gray Australia Simon Mawhinney says $U30 a barrel is not sustainable for the industry. Futures market pricing suggests that the long-run oil price may average $US44 a barrel until 2023.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, BEACH ENERGY LIMITED – ASX BPT, ALLAN GRAY AUSTRALIA PTY LTD

Oil Search eyes $1bn raising

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Original article by Perry Williams
The Australian – Page: 16 : 7-Apr-20

Shares in Oil Search have been placed in a trading halt until 14 April, pending an announcement regarding a capital raising. The oil and gas producer is expected to raise at least $1bn to strengthen its balance sheet in the wake of a sharp fall in the crude oil price. The slump has weighed on Oil Search’s shares, which have fallen in value from more than $7 at the start of 2020 to just $2.73, reducing its market capitalisation to $3.89bn. The new shares may offered at around $2 apiece.

CORPORATES
OIL SEARCH LIMITED – ASX OSH

Santos sailing steady ship but gas delay on horizon

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Original article by Perry Williams
The Weekend Australian – Page: 28 : 4-Apr-20

Oil and gas group Santos remains confident that its $3.6bn Narrabri gas project in New South Wales will receive state government approval, but it has conceded that this may not occur before mid-2020 due to the pandemic. Meanwhile, Santos chairman Keith Spence has told the group’s annual meeting that it has no plans to undertake a capital raising at present, despite the recent slump in the crude oil price. Santos has already delayed several growth projects.

CORPORATES
SANTOS LIMITED – ASX STO

Oil M&A looms as Woodside clears decks; FAR in trouble

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 & 22 : 31-Mar-20

James Byrne of Citibank is among the analysts who expect Woodside Petroleum to seek acquisitions after putting its key growth projects on hold. He notes that the oil and gas group has $US4.9bn in cash and $US7.9bn in liquidity, and it may be prepared to temporarily lose its BBB+ credit rating if the right acquisition emerges. Meanwhile, Far Limited has advised that the sharp decline in the crude oil price in recent months means that it cannot finalise new debt facilities to finance its share of the Woodside-led Sangomar oil project in Senegal.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, FAR LIMITED – ASX FAR, CITIBANK PTY LTD