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Marathon oil to a record 52 weeks low October 3, 2011

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Marathon Oil traded today at a new 52-week low of $20.83. So far today approximately 7.2 million shares have been exchanged, as compared to an average 30-day volume of 8.5 million shares.

Marathon Oil Corporation, through its subsidiaries, is an integrated oil firm with operations worldwide. The Company explores for and produces and markets liquid hydrocarbons and natural gas on a worldwide basis. Marathon also mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada and refines, markets and transports crude oil and petroleum products.

There is potential upside of 73.5% for shares of Marathon Oil based on a current price of $21.19 and an average consensus analyst price target of $36.76. Marathon Oil shares should first meet resistance at the 50-day moving average (MA) of $26.13 and find additional resistance at the 200-day MA of $41.59.

Marathon Oil share prices have moved between a 52-week high of $54.33 and the current low of $20.83 and are currently at $21.19 per share. Over the last five market days, the 200-day moving average (MA) has gone down 0.7% while the 50-day MA has declined 3.3%.

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Gennady Timchenko to control construction giant ARKS September 13, 2011

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Gennady Timchenko’s energy trading company Gunvor recently acquired a stake in construction giant ARKS and bought an option to take control of the company. A new step forward for the Finnish businessman’s diversification strategy.

A month after gaining control of mining company Kolmar Coal (51%) for approximatively $400 million, Gennady Timchenko’s Gunvor, the third independent energy trading company in the world, goes further with ARKS.

The company acquired last week 21% of one of the leading Russian construction company, ARKS, in order to diversify from oil and gas business. The Moscow-based company is notably specializing in building roads and highways in the Moscow region.

According to Russian newspaper Kommersant, Gennady Timchenko bought 21% of the building company for $200 million. Moreover, the businessman received an option to take control within a few months.

Founded in 2003, the ARKS group was formerly known as UM #4, Russian oldest construction company (since 1926). The group has three main affiliates: Create Story (construction), UM #4 (demolition) and Nataland (engineering services).

Since 2010, Gunvor has launched a wide diversification strategy. According to analysts Gunvor’s recent moves are a bid to curb the company’s reliance on oil and gas, which currently represent most of Gunvor’s turnover.

Gunvor founder and co-owner Gennady Timchenko is a Finnish businessman with Russian origins, specializing for decades on Russian oil and infrastructures.

ConocoPhillips will split refining and exploration/production August 2, 2011

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ConocoPhillips, the $226 billion Houston-based oil giant, yesterday said that it will spin off its refining and marketing operation, in a move aimed at creating more value as two separate publicly-traded companies.

The announcement sent the stock pf the third largest oil firm in the US up by 6.43 per cent to $79.18 in morning trading on the New York Stock Exchange. ConocoPhillips plans to separate its oil refining and marketing business from its exploration and production operations.

The split would create two publicly-traded companies, one focused on finding and extracting oil and gas around the world, and the other on converting the crude into refined products such as gasoline that could be sold to consumers.

It is the first oil major to shift from the decades-old industry strategy of consolidating production and refining, though in May 2011 the much smaller Marathon Oil decided to spin off its refining business by forming Marathon Petroleum Corp, a stand-alone company.

ConocoPhillips will become the largest refining company in the US based on capacity and the largest exploration and production company based on oil and gas reserves

Oil demand should remain strong, oil getting higher July 13, 2011

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Oil rose Tuesday after the Organization of Petroleum Exporting Countries said global demand will be the highest ever this year, although the “unsteady” global economy may slow demand more than previously thought.

Benchmark West Texas Intermediate crude for August delivery rose 45 cents to $95.58 per barrel in morning trading on the New York Mercantile Exchange. Brent crude, which is used to price many international oil varieties, fell 54 cents to $116.70 per barrel on the ICE Futures exchange in London.

Analysts and investors pay special attention to world demand forecasts. The expectation that China and other developing nations will keep using more crude has supported prices this year despite weak gasoline consumption in the U.S. and a festering credit crisis in Europe that has raised concerns about international demand for oil.

While OPEC thinks global demand will continue to increase this year to the highest levels ever, the monthly report it released Tuesday said that demand won’t grow as much as it previously expected. The cartel said daily world consumption will increase this year by 1.36 million barrels — down from a previous estimate of 1.38 million barrels — to an average 88.18 million barrels.

OPEC said it cut demand expectations “as the unsteady global economy has added risks to the forecast.” The report also said it’s hard to estimate how much oil the U.S. will consume this year. Gasoline consumption fell ahead of the summer driving season as retail prices approached a national average of $4 per gallon. A gallon of regular has since dropped by nearly 35 cents to a national average of $3.636 on Tuesday, according to AAA, Wright Express and Oil Price Information Service. It’s still 92.1 cents higher than the same time last year.

Meanwhile, the Labor Department said Tuesday that job openings were flat in May, suggesting that hiring may not pick up this summer. The U.S. trade deficit also jumped in May to the highest level since October 2008, primarily because of a surge in the price of oil imports at that time.

In Europe markets slumped on fears that Greece’s financial crisis would spread to Italy and Spain. The dollar continued to rise against other major currencies. Oil, which is priced in U.S. currency, tends to fall as the dollar rises and makes crude more expensive for investors holding foreign money.

In other Nymex trading for August contracts, heating oil fell 2 cents to $3.0657 per gallon and gasoline futures lost 2 cents at $3.0515 per gallon. Natural gas gained 1 cents at $4.291 per 1,000 cubic feet.

Is IEA oil release a stimulus measure for consumers? June 27, 2011

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The International Energy Agency’s planned release of oil from reserves is being used as an economic stimulus measure that will serve as a “tax cut” for consumers if it’s successful in driving down prices, according to a report today from IHS-Cambridge Energy Research Associates.

The release from emergency stockpiles of 60 million barrels of oil, or 2 million barrels a day for 30 days beginning next week, follows a disruption in supplies from Libya and could boost both consumer spending power and confidence, according to IHS-CERA’s Daniel Yergin and James Burkhard.

“Although oil prices have come down since Brent reached $126 per barrel in April, worries about the potential for another economic slowdown have grown,” the report said. “The oil release signals that IEA members are taking into account the broader macroeconomic environment to decide on using strategic reserves.”

Oil for August delivery declined 25 cents to $90.77 a barrel at 2:04 p.m. on the New York Mercantile Exchange. Prices have fallen 2.8 percent this week and gained 19 percent in the past year.

Exxon discovers deepwater oil and gas in Gulf of Mexico June 8, 2011

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Exxon Mobil Corp. (XOM) unveiled two major oil discoveries and a gas discovery in the deepwater Gulf of Mexico with the potential for the recovery of more than 700 million barrels of oil equivalent.

Shares were up 2.1% to $81.68 in early trading. The stock is up 33% in the past year amid an industry rebound driven by high oil prices.

The world’s largest publicly traded oil company said the find was made after it drilled its first exploration well in the region since the nine-month U.S. moratorium following the Deepwater Horizon disaster was lifted.

The announcement follows Noble Energy Inc.’s (NBL) disclosure at the end of May that it had struck oil at its Santiago prospect.

“This is one of the largest discoveries in the Gulf of Mexico in the last decade,” Steve Greenlee, president of Exxon Mobil’s exploration business said. “More than 85% of the resource is oil with additional upside potential.”

The well, which encountered more than 475 feet of net oil pay, is located in the Keathley Canyon region, about 250 miles southwest of New Orleans, in about 7,000 feet of water.

Exxon in April reported its first-quarter earnings surged 69% as the company benefited from high oil prices, stronger refining margins and a jump in natural gas production.

Oil companies profits : problem or solution? May 25, 2011

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A very interesting analysis of the usual critics of oil companies major by the republican blog Red State. Read, think about it, and let me know what you think about this…

Left to its own devices, the oil industry is its own worst enemy. Relatively low barriers to entry have made the industry freely competitive. The reward goes to the quickest and the most efficient companies; just like in a Gold Rush, we remember the big winners and quickly forget the also-rans. Since the days of Colonel Drake, Patillo Higgins and Dad Joiner, twas ever thus.

The consumer ultimately benefits from a profitable and efficient energy business in the form of affordable and abundant energy supplies. This is because energy is essentially a “grow or die” business. An oil company that does not efficiently replace its production with new reserves is essentially holding a “going out of business sale” with every barrel of oil it produces.

The effort to replace reserves is funded out of profits.To hear the press or Leftist politicians speak, you would think that oil industry profits are a problem, a problem that desperately needs a government solution (read: higher taxes). (more…)

Schlumberger goes up despite desappointing results April 21, 2011

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Schlumberger Ltd (SLB.N), the world’s largest oilfield services company, posted a lower-than-expected quarterly profit on Thursday, but said customer demand would rise, sending its share price up.

Oil prices have climbed above $110 a barrel, prompting producers, including Saudi Arabia, to ramp up spending on new fields to increase their output capacity and make up for supplies that have been cut off from Libya.

“The absence of Libyan production worries the oil producers. They do not like too high… oil prices because of the potential it has to destroy demand,” said Chief Executive Andrew Gould. “I think that I’m much more confident that the international stream is going to come back faster.”

Still, Schlumberger’s first-quarter operations were hurt by the unrest in energy-rich countries Egypt, Tunisia and Libya.

Flooding in Australia and poor weather in North America also dampened its business, but Gould said the energy industry was spending heavily to make up for Libya and higher demand for gas and fuel oil in Japan.

One analyst said the company’s profit margins remained healthy compared to its peers.

“They’ve essentially caught up to Halliburton in North American margin performance,” said Kurt Hallead, an analyst with RBC Capital Markets in Austin, Texas.

Halliburton (HAL.N), the global No. 2 in oilfield services and market leader in North America, topped market expectations on Monday, with its first-quarter earnings [ID:nN15257560] boosted by its business in the United States.

Schlumberger’s first-quarter profit rose to $944 million, or 69 cents per share, from $672 million, or 56 cents per share, a year earlier.

Excluding one-time items, Schlumberger earned 71 cents per share, compared with the 76 cents that analysts expected, according to the average on Thomson Reuters I/B/E/S.

Schlumberger warned late last month that turmoil would knock 8 to 10 cents per share off its first-quarter earnings. [ID:nN28176824].

Revenue rose 56 percent to $8.72 billion, slightly below the average analyst forecast of $8.82 billion.

Earlier on Thursday, Weatherford International Ltd (WFT.N), the world’s fourth-largest oilfield services company, reported a first-quarter profit compared with a loss a year earlier, helped by higher revenue in the company’s North America segment. [ID:nL3E7FL0FX]

Schlumberger’s shares rose 1.4 percent to $89.09 per share on the New York Stock Exchange, bringing its gain so far this year to nearly 7 percent

Could climbing oil prices destroy economical recovery? March 5, 2011

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Libya today. Tomorrow the whole arabic peninsula? Oil trading analysts are scared of what could become a major problem for a recvoering world economy. With $200 a barrel, ain’t we doomed for a new recession?

Oil has been trading at more than $100 a barrel in the U.S. the past couple of days, largely because of fighting in Libya. That has gasoline prices up, too.

The Energy Information Administration says last week the average price for regular gasoline across the country jumped nearly 19.4 cents to $3.34 a gallon. That was the steepest one-week rise since Hurricane Katrina disrupted oil production in the Gulf of Mexico in 2005.

Now there are concerns higher gas prices could stall a recovering economy. You can count Joe Occhipinti of Portland, Ore., among the concerned.

“I’m getting $20 worth of gas,” Occhipinti said, standing near his white work van at an Arco station. “I can’t afford to fill it up.”

Occhipinti, a cabinetmaker, estimates he’s spending about $100 a week on gasoline. That makes it difficult to keep his costs down and his jobs profitable.

“Lumber — all that other stuff — I can factor in, but this thing happens with Libya and now all of the sudden gas prices are raised up, but I made my bid three months ago,” he said.

Occhipinti also is relearning a lesson from 2008 when gas sold for $4 a gallon: Spending more on gas means you have less to spend elsewhere.

“One of the things that I miss a lot [is] taking my wife out to dinner,” he said.

Instability in the Middle East is largely blamed for the most recent jump in oil prices. But government data show a steady increase since September. That’s because demand for oil has been going up in the U.S. after declines during the recession. Then the fighting in Libya prompted traders to worry about supply.

“If you were to remove some of that oil supply, we’d be in a situation where demand could exceed supply, and that’s just a scary moment in economics,” says Patrick DeHaan, senior petroleum analyst at GasBuddy.com.

Wikileaks reveals BP Russian problems… January 19, 2011

Posted by mytruthaboutoil in Geostrategy, Oil (general), Oil giants.
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The oil spill was not enough for BP. A new cable published by WikiLeaks shows the big challenges BP faces in its new Arctic exploration joint venture, and also sheds some light on the Russian government’s motivation for allowing the unprecedented deal with state-controlled oil company Rosneft in the first place.

The cable, which quotes Tim Summers, the former acting Chief Executive of BP’s Russian joint venture TNK-BP, shows how Russia’s oil industry has operated far below international technical standards, but struggled to improve its efficiency because of government interference in the sector. It reveals why Rosneft so badly needs BP expertise to tap oil and gas reserves in Arctic waters, but also raises questions over whether BP will be able to deliver on its ambitious plans in the sclerotic Russian operating environment.

TNK-BP declined to comment on the cable. A representative of Summers declined to comment.

In a September 11 2009 meeting with the U.S. Ambassador to Moscow, Summers is said to have talked at length about problems in the Russian oil industry.

The cable said:

“The inefficiencies in the system ‘are so huge’, according to Summers, that it would take a very long time to modernize the Russian oil and gas sector.  Summers pointed out that a well that would take 10 days to drill in Canada would take 20 days to drill in Russia. He said moving a drilling rig from one site to another, a process that might take 7 or 8 hours in Canada, takes 28 days in Russia.

“Multiply that by hundreds or thousands [of rigs] and you can start to imagine the costs.”

Rosneft executives admitted earlier this month that one of the main motivations for the BP deal was access to better technology. “Acquiring new knowledge…is of the greatest importance,” said Igor Sechin, Russia’s Deputy Prime Minister and Chairman of Rosneft.

It appears that a joint venture with a company like BP may be the only way to achieve this. Many state-run oil companies in other regions, notably the Middle East, have been able to lead development complicated oil and gas projects in close collaboration with Western oil service companies. However, Summers said these companies were reluctant to enter Russia because of worries about intellectual property theft or negative headlines about the business environment.

“Russia continues to be seen as too risky by many service companies,” he is quoted in the cable.

Summers also outlined how direct government interference hampered the work of oil companies.

“Oil company Slavneft (on whose board Summers sits), had been ordered to cancel an order for foreign equipment in favor of a domestic supplier, even though the foreign equipment was clearly superior,” the cable said. “Sechin (who is in charge of the energy sector) told Summers directly that he should be using Russian gas turbines instead of the preferable General Electric models TNK-BP was buying.”

Whether BP’s Arctic venture with Rosneft will face similar interference is debatable. Summers was talking about onshore oil drilling, for which Russia has an established industry with significant vested interests. In contrast, Russia currently has no offshore oil industry to speak of, so the pressure to patronize local companies may be lower.

These comments show the particular challenges of operating in Russia, but they also show how things have changed. That Sechin has gone from quibbling about turbine suppliers in 2009 to approving a multi-billion dollar exploration agreement in 2011, suggests a more accommodating stance to foreign involvement in Russian oil and gas.