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Page added on March 27, 2018

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Oil’s Seven Sisters Enter a ‘Golden Age’

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The world’s largest oil companies have survived a life-changing crisis, and are now poised to reap the rewards, Goldman Sachs Group Inc. said.

Big Oil is in a sweet spot with rising oil prices and low operating costs, leaving them with the biggest cash-flow growth in two decades and boosting earnings, Goldman said in a report Monday. That will increase their attraction for investors after years of elevated spending followed by crude’s slump sent their weighting in global equity indexes to a 50-year low, according to the bank.

“We see this as the start of a new golden age for Big Oil’s reborn Seven Sisters,” said analysts led by Michele Della Vigna, referring to the seven largest non-state oil companies. It is “also a favorable environment for returns in the commodity.”

Crude’s slump since the middle of 2014 wiped out some smaller companies and changed the way the biggest operate as they continue to drive down costs in an attempt to survive. A downturn is typically followed by a period of relative plenty as the cost of getting new barrels out of the ground takes time to catch up with the crude price, widening profit margins.

The majors are leading the pack. While crude’s collapse pushed the weight of oil companies in equity indexes to about 5 percent, less than half their normal level, Big Oil is now in a position to regain its standing. The slump culled smaller drillers and has left the larger ones with the opportunity to take more market share.

Royal Dutch Shell Plc, Total SA and BP Plc are among the majors that reported the highest earnings in years last quarter. Some even started share buybacks and others are promising higher dividends.

They are also benefiting from the start up of projects sanctioned years ago but were delayed by the downturn, Goldman said.

The years from 2011 to 2013 “witnessed the largest number of project sanctions in the history of the oil and gas industry,” Goldman said in the report. “While those investments are likely to yield low through-cycle returns, all these projects are now coming into production, releasing unproductive capital and providing the industry with the strongest production, cash flow growth in two decades.”

RIGZONE



17 Comments on "Oil’s Seven Sisters Enter a ‘Golden Age’"

  1. Dredd on Tue, 27th Mar 2018 7:45 am 

    Those seven putas have stormy weather ahead (First Shots Fired In The Currency Wars – 4).

  2. BobInget on Tue, 27th Mar 2018 8:56 am 

    Fynn Retweeted Trading News

    Happening now: Saudi finance minister mohamed al-JADAAN “several countries will be running out of supply” re: new global oil supply. @MorningsMaria @FoxBusiness

    Latest draw prediction due in 35 m

    kxviswan

    Got some new estimates from two sources on crude
    I have import estimates from two sources. I am using the higher import number for the exercise. The imports are at 7.83 MM barrels/day. This is about 800K/day more than last week.

    Apparently exports jumped to near 1.9 MM barrels/day.

    Now this will result in a draw of 3 MM barrels.

    That is quite a change from my original estimate of 4 MM build based on 8.4 MM barrels/day import and 1.5 MM barrels/day export.

    I am now seeing funny things happen. Dilam that came in with 2 MM barrels Saudi crude only discharged 1 MM barrels. It then picked up 1 MM barrels of US crude and left for China.

  3. BobInget on Tue, 27th Mar 2018 9:05 am 

    I’m wrong. Today is Tuesday, NOT Wednesday.
    EIA due 10:30 Wednesday.

    Keep in mind we NEED, require, at least 20 M B BUILD to make it through spring/summer.
    AT build of 2/4 MB build is predicted .
    Traders saw this and dropped PoO at once’
    See chart;
    http://www.livecharts.co.uk/MarketCharts/crude.php

    (gotta pay da rent, child support, drug dealer)

  4. BobInget on Tue, 27th Mar 2018 9:08 am 

    Dredd et all,
    All ya need ta know: It’s All Bout Oil”.
    You have front row seat rat cheer.

  5. joe on Tue, 27th Mar 2018 9:35 am 

    If a Saudi prince says so, it must be true… Lets not forget, those guys are fighting armies of Yemeni children with famine as a weapon, so you just know they’re the good guys!!!!

  6. joe on Tue, 27th Mar 2018 9:43 am 

    https://www.gatestoneinstitute.org/12097/isis-surging-syria

    Isis back in the oil game as well. Guess I’ll have to cancel those tickets for the bataclan theatre, and forget the nightclub after and my planned beach visit the next day….

  7. BobInget on Tue, 27th Mar 2018 10:20 am 

    If it’s one thing we can believe coming out of Saudi mouths, it’s their need for cash.

    Currently, besides invading Yemen, going on four years, we have Syria, invaded 2011, US invasion of Iraq made Iran The mid-east super power and predominant enemy of Israel and Saudi Arabia.

    Of course KSA will beat war drums for higher oil
    prices. I also suspect ARAMCO is getting lousy water and CO/2 injection results. When the only well product is salt water it’s time to sell shares to dumb investors.

    US lawmakers just voted in another 2 TRILLION
    in debt making hyper oil war inflation nearly unavoidable.

    Of course this pragmatist invested in oil pipelines from Canada. I’m not buying LT viability of ‘oil shale’.

  8. BobInget on Tue, 27th Mar 2018 10:48 am 

    https://www.nasdaq.com/article/saudi-arabia-to-keep-its-april-crude-oil-exports-under-7-mln-bpd-20180314-00319

    Ya hafta wonder. Can ARAMCO produce MORE than 10 MB p/d again?

    (domestic consumption;
    https://www.indexmundi.com/energy/?country=sa&product=oil&graph=consumption

    Take a minute. Google jet fuel consumption of F16’s or monster Leopard tanks.
    When USA aircraft air refuels a Saudi bomber on its way to Yemen, that jet fuel is counted as ‘domestic’ consumption’.

  9. BobInget on Tue, 27th Mar 2018 11:28 am 

    https://www.reuters.com/article/us-saudi-oil-exclusive/exclusive-opec-russia-consider-10-20-year-oil-alliance-saudi-crown-prince-idUSKBN1H31SK

    Russia/KSA CONCIDER LT AGREEMENT.

    Could this spell the end of OPEC?
    The beginnings of an Asian alliance?
    Where does USA fit in here?
    Will Canada, America’s last supplier, go along with Russia or China?

    With Chinese block controlling future African and future S. American production, it falls to China, Russia, certainly KSA to bust Both US and Iranian production by diverting oil to “defense”,
    not useful projects.. Like sea-walls, not political
    anti immigration walls and infrastructure rehab.

  10. deadly on Tue, 27th Mar 2018 3:27 pm 

    The world is short one hundred million barrels of oil each day. Somebody has to sail an oil tanker to Japan every day.

    The stock market took a healthy dump today.

    Netanyahu has been rushed to the hospital coughing and with a high fever.

    Poor guy, not feeling too good, got sicker than a dog.

    Over at zerohedge, the commenters are rejoicing.

    As long as oil flows, life will go on.

  11. rockman on Wed, 28th Mar 2018 11:22 am 

    Dredd – “Those seven putas have stormy weather ahead”. FYI: there are no longer Seven Sister. As the consolidation that’s been underway for decades there will eventually less siblings then we have today.

  12. Cloggie on Wed, 28th Mar 2018 1:54 pm 

    Bang! There you have it, the end of doomerism:

    So far the 2 largest solar projects in the “pipeline” (edgy choice of words) were 2 GW projects in Greece and Australia.

    Ha!

    These projects just have been dwarfed. Dwarfed. DWARFED!!!

    https://www.bloomberg.com/news/articles/2018-03-28/saudi-arabia-softbank-ink-deal-on-200-billion-solar-project

    Today, the ever vigilant Saudi crown prince Salman and some Japanese moneybag hitherto unknown (to me), have announced that they are going to realize a gigantic 200 GW of photovoitaic solar in the Saudi desert before 2030!

    There, you have it. KSA just killed the oil age!

  13. Davy on Wed, 28th Mar 2018 1:56 pm 

    There you have what? Give me a break nedernazi. There is more to doom than a few solar panels and wind turbines.

  14. Cloggie on Wed, 28th Mar 2018 2:06 pm 

    There you have what? Give me a break nedernazi. There is more to doom than a few solar panels and wind turbines.

    In the case of America you are so right, mr Last Soviet Standing.

  15. Boat on Thu, 29th Mar 2018 1:13 am 

    200 gw will free up some oil to sell. Even mm could get a job cleaning them panals.

  16. Boat on Thu, 29th Mar 2018 1:18 am 

    Wonder if Musk will get the job in exchange for batteries and electric cars. And a trip to Mars. Dig tunnels for the cars to beat the heat.

  17. GregT on Thu, 29th Mar 2018 1:55 am 

    RIGPORN.

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