-The refining divisions of integrated oil companies such as BP and Shell may soften the blow of profit declines caused by falling oil prices. Via the Wall Street Journal, BP generates $500 million in extra pretax profit for each dollar-per-barrel improvement in profit margin for refined products. This compares to a $275 million profit hit when the price of Brent crude drops by $1. Some investors have pressured Shell to get out of the downstream business due to poor performance in its refining business. Refining, however, may prove to be a bright spot as oil prices hover dangerously close to the $85 per barrel threshold analysts say BP and Shell need to break even.
-Meanwhile, natural gas producers in the Marcellus and Utica shale plays will still make money even if gas prices remain mired in the $2 to $3 per million Btu range. Via Platts, Tudor Pickering Holt analysts believe 80-90% of the rigs running in the Marcellus could generate returns with prices below $3 per million Btu and 55% could get returns at $2 per million Btu. Nevertheless, panelists at Platts’ Appalachian Oil & Gas Conference on Thursday said prices would rise in the next several years due to robust production growth, increased exports and new infrastructure.
-Chevron today announced a new drillship had arrived in the Gulf of Mexico. Via FuelFix, the Pacific Sharav will operate in the Keathley Canyon under a five-year contract with Pacific Drilling. The ship has seven high-pressure pumps and can operate in water as deep as 12,000 feet.
-CF Industries and Norwegian fertilizer company Yara International ASA ended talks to merge after the two firms failed to agree on terms. Via the Wall Street Journal, the merger would have created a company with $18 billion in annual sales.
-Veresen Inc. appointed Elizabeth (Betsy) Spomer president and CEO of Jordan Cove LNG and executive vice president of Veresen. The Department of Energy in March granted Veresen the right to export LNG from the proposed Coos Bay, Ore., terminal to non-free-trade-agreement countries. Spomer previously served as senior vice president of global business development for BG Group. She has also held senior management positions at BP and Amoco.
