Archive for Energy

Clean Energy Fuels Shares Rise 30% on Partnership with Chevron’s Adopt-a-Port Initiative

The Energy Report

Source: Streetwise Reports   07/08/2020

Shares of Clean Energy Fuels Corp. established a new 52-week high after the company reported it is teaming up with Chevron on its Adopt-a-Port renewable natural gas initiative to reduce emissions.

Clean Energy Fuels Corp. (CLNE:NASDAQ), which supplies compressed, liquefied and renewable natural gas for light-, medium- and heavy-duty vehicles, yesterday announced that it is partnering with Chevron Corp. (CVX:NYSE) on its Adopt-a-Port initiative. The firms stated that “the Adopt-a-Port program provides truck operators serving the ports of Los Angeles and Long Beach with cleaner, carbon-negative renewable natural gas (RNG) to reduce emissions.”

As part of the Adopt-a-Port program, Chevron will be responsible for providing funding to subsidize truck operators to cover the cost of buying new RNG-powered trucks and supplying RNG to Clean Energy stations located near the ports. Clean Energy is charged with offering fueling services to qualified truck operators and managing the program.

The companies claimed that the initiative will serve to eliminate climate pollutants and will result in the reduction of smog-forming NOx emissions by 98% compared to diesel trucks.

Chevron’s V.P. of Americas Products – West Mike Vomund, commented, “We are excited to be partnering with Clean Energy as we continue to innovate in the renewable, low-carbon fuel space…Along with other recent investments like CalBio, selling branded renewable diesel in San Diego County and piloting EV charging stations, Adopt-a-Port further demonstrates Chevron’s commitment to increasing renewables in support of our business, continuing our overall aim to provide the affordable, reliable and ever-cleaner energy.”

“Switching trucks to fuel with RNG is vital to improving air quality and fighting climate change in our country’s largest port complex,” said Greg Roche, vice president, Clean Energy. “We’re proud to partner with Chevron on the Adopt-a-Port initiative that will put additional clean, carbon-negative trucks on the road and lessen the environmental impact on operations in the region.”

Clean Energy Fuels Corp. is based in Newport Beach, Calif., and is a provider of clean fuel for the transportation market. The company’s Redeem™ renewable natural gas (RNG) is derived from captured biogenic methane that is produced from decomposing organic waste. The company’s RNG products help power commercial vehicle fleets, airport shuttles, city buses and waste and heavy-duty trucks. The firm indicates on its website that it has a network of approximately 540 fueling stations across the U.S. and Canada and can deliver Redeem through both compressed natural gas (CNG) and liquefied natural gas (LNG).

Clean Energy started the day with a market capitalization of around $444.0 million with approximately 200.9 million shares outstanding. CLNE shares opened higher today at $2.29 (+$0.08, +3.62%) over yesterday’s $2.21 closing price and reached a new 52-week high price this morning of $3.75. The stock has traded today between $2.28 and $3.75 per share and is currently trading at $2.87 (+$0.66, +29.81%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: CLNE:NASDAQ,
)

Natural Gas and Revenue Start Flowing for this Producer

The Energy Report

Source: Streetwise Reports   07/08/2020

Alvopetro Energy’s “important milestone” and expansion potential are covered in a Mackie Research Capital Corp. report.

In a July 7 research note, Mackie Research Capital Corp. analyst Bill Newman reported that Alvopetro Energy Ltd. (ALV:TSX.V; ALVOF:OTCQX) “achieved an important milestone” by connecting Brazil’s Caburé to Bahiagás’ distribution network and commencing its first physical sales production from the natural gas field.

“This is an important milestone as the company is now generating free cash flow that can be reinvested into other growth opportunities. We expect the stock to trade up on the news,” Newman stated.

“Natural gas and revenue are flowing,” Newman added. “With the production facilities in place, new discoveries can be quickly monetized.”

The analyst noted that Alvopetro ramped up its natural gas production on July 6 to 10.6 million cubic feet per day (10.6 MMcf/d). For each million British thermal units of gas it sells, it will receive US$5.13 this month.

Revenue of US$5.9 million is expected in H2/20, Newman highlighted, with a near tripling to US$16.7 million in 2021. The Calgary-based firm is expected to use the cash flow for other growth opportunities its portfolio of assets presents.

Newman also pointed out that Alvopetro intends to expand production to 17.6 MMcf/d, the total capacity of its transfer pipeline and gas treatment facility. To do so, the company plans to start a drill program, perhaps in late 2020.

Mackie has a Speculative Buy rating and a CA$1.65 per share target price on Alvopetro. In comparison, the stock is now trading at CA$0.78 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Alvopetro Energy. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

 

Disclosures from Mackie Research, Alvopetro Energy Ltd., Update, July 6, 2020

RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
1. None Applicable.
2. Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.

ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

( Companies Mentioned: ALV:TSX.V; ALVOF:OTCQX,
)

Oil Holds Up As Gasoline Stocks Fall

By Orbex

Inventories Surge Higher

Crude oil prices have managed to remain near recent highs this week. This is despite the latest report from the Energy Information Administration highlighting a further rise in US crude inventories.

The EIA reported that in the week ending July 3rd, US crude inventories increased by another 5.7 million barrels. This is a wildly different result to the 3.1 million barrel decline the market was looking for.

Imports Rise Again

Regionally, crude levels in the Gulf Coast region rose the most. Levels there moved to record highs of 309 million, creating fresh fears over storage capacity in the US.

A great deal of this build was attributed to a fresh increase in imports. Net crude US imports jumped by 2.13 million barrels per day last week. Imports rose to 5.01 million barrels, hitting their highest level since the summer of 2019.

In the Gulf Coast specifically, imports jumped by 1.8 million barrels per day to 3.2 million barrels per day, marking their highest level since summer 2018.

Gasoline Demand Bouncing Back

However, despite news of an increase in the headline inventories number, oil prices remained supported amidst news of a strong drop in US gasoline stocks.

Fuel stores fell by 4.8 million barrels over the week, far outstripping analyst expectations for only a slight decline.

Despite the easing of lockdown measures over recent weeks, gasoline stocks had remained elevated up until the decline reported last week. This is encouraging evidence of the pickup in activity as people return to work and begin moving around again.

The summer is typically the highest period of demand for gasoline, dubbed “the summer driving season.” Hopefully, this latest report will help assuage fears that gasoline demand might remain low all summer.

However, despite the drop in gasoline stocks, distillate inventories, which include diesel and heating oil, were higher over the week by 3.1 million barrels.

This latest increase, which stands in stark contrast to the 75k barrel drop expected, takes inventory levels up to 177.3 million barrels, their highest level since the early 1980s.

Risk Sentiment Remains Supportive

Oil prices have been broadly supported over recent weeks. This is due to the resilience seen in equities markets.

Traders appear to be looking beyond fears of a second wave of the virus currently. Instead, they seem to be focusing on the tentative, post-lockdown recovery.

They’re also looking to the wave of central bank easing in response to the virus. This, for now, is keeping oil prices supported.

Oil Rally Running Out of Steam

The rally in crude oil continues to stagnate around the 61.8% retracement of the decline from 2020 highs.

However, while price holds above the 33.17 level, focus remains on further upside and an eventual break above the 42.43 level.

However, should price break back below the 33.17 level, focus will turn to deeper support at the 25.65 mark.

By Orbex

Sunrun to Acquire Vivint Solar for an Enterprise Value of $3.2 Billion

The Energy Report

Source: Streetwise Reports   07/07/2020

Sunrun Inc. shares traded 25% higher and reached a new 52-week high after the company reported that it has signed a definitive agreement to acquire Vivint Solar in an all-stock merger deal.

Residential solar, battery storage and energy services company Sunrun Inc. (RUN:NASDAQ) and full-service residential solar provider a Vivint Solar Inc. (VSLR:NYSE) yesterday evening announced that “the companies have entered into a definitive agreement under which Sunrun will acquire Vivint Solar in an all-stock transaction, pursuant to which each share of Vivint Solar common stock will be exchanged for 0.55 shares of Sunrun common stock, representing a combined Enterprise Value of $9.2 billion based on the closing price of Sunrun’s shares on July 6, 2020.”

The firms stated that after the transaction is completed, Vivint Solar and Sunrun shareholders will own approximately 36% and 64% respectively of the fully diluted shares of the combined company. The report pointed out that “the exchange ratio implies a 10% premium for Vivint Solar shares based on closing prices on July 6, 2020, and a 15% premium to the exchange ratio implied by the three month volume weighted average price of Vivint Solar and Sunrun shares.”

Sunrun’s CEO and co-founder Lynn Jurich commented, “Americans want clean and resilient energy. Vivint Solar adds an important and high-quality sales channel that enables our combined company to reach more households and raise awareness about the benefits of home solar and batteries…This transaction will increase our scale and grow our energy services network to help replace centralized, polluting power plants and accelerate the transition to a 100% clean energy future. We admire Vivint Solar and its employees, and look forward to working together as we integrate the two companies.”

Vivint Solar’s CEO David Bywater remarked, “Vivint Solar and Sunrun have long shared a common goal of bringing clean, affordable, resilient energy to homeowners. Joining forces with Sunrun will allow us to reach a broader set of customers and accelerate the pace of clean energy adoption and grid modernization. We believe this transaction will create value for our customers, our shareholders, and our partners.”

After the merger is finalized, the combined entity will have a combined customer base of around 500,000 customers with over 3 gigawatts of solar assets on the balance sheet. The companies stated that residential solar has reached only about 3% penetration in the U.S. so the opportunity for future growth is still quite large. Sunrun also expects to benefit from significant cost synergies from the merger, which it estimates to total $90 million annually.

Under the terms of the definitive transaction agreement, each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time of the merger will be converted automatically into the right to receive 0.55 shares of Sunrun common stock.

The report indicated that the Vivint acquisition by Solar has already been unanimously approved by the boards of directors of both companies and is expected to be completed during Q4/20 subject to subject to approval by Vivint Solar and Sunrun stockholders, regulatory approvals and other customary closing conditions.

Sunrun is headquartered in San Francisco and states that its Brightbox home battery solution offers affordable and reliable energy and that it has the capability to manage and share stored solar energy from the batteries providing benefits to households, utilities and the electric grid.

Vivint Solar is a full-service residential solar provider based in Lehi, Utah. The company designs, installs and finances solar energy systems for homeowners and offers related monitoring and maintenance services. In addition, the firm indicated that it offers solar plus storage systems with LG Chem home batteries and electric vehicle chargers with ChargePoint Home.

Sunrun began the day with a market capitalization of around $2.6 billion with approximately 120.3 million shares outstanding and a short interest of about 15.2%. RUN shares opened 12% higher today at $23.95 (+$2.61, +12.23%) over yesterday’s $21.34 closing price and reached a new 52-week high price this morning of $27.59. The stock has traded today between $23.46 to $27.59 per share and is currently trading at $26.80 (+$5.46, +25.68%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: RUN:NASDAQ,
)

Coverage Initiated on Wind Farm Firm Poised for ‘Highly Profitable’ Growth

The Energy Report

Source: Streetwise Reports   07/07/2020

The investment thesis for Ørsted A/S is presented in a Pareto Securities report.

In a July 2 research note, analyst Tom Erik Kristiansen reported that Pareto Securities initiated coverage on Ørsted A/S (ORSTED:NDAQ; DNNGY:OTCMKTS), “the world’s largest offshore wind operator” with a Buy rating and a DKK900 per share target price. Ørsted’s current share price is DKK803 in comparison.

Kristiansen made a case for why this Denmark-headquartered firm makes for a solid investment.

One, the renewable energy firm, which develops, constructs, owns and operates offshore wind farms, leads the industry. With its 24 producing assets and an existing pipeline, it holds 30% of the market share.

Ørsted is on track to grow 15% per year, to 15 gigawatts (15 GW) by 2025, and is ahead of schedule in that regard. Already, the company met its 15 GW by 2025 offshore goal but is about 3 GW shy of reaching its 5 GW onshore target.

Expected growth “is expected to be highly profitable” and the outlook “warrants higher pricing” for Ørsted, Kristiansen purported. The company guided to a 10% return on capital employed between 2019 and 2025 and 80%-plus of EBITDA between 2020 and 2040.

Further, those projections are protected by “fixed price contracts with government in developed markets or large corporations as counterparties,” which alone can support the current share price over time, noted Kristiansen and speaks to Ørsted’s compelling business model.

Also positive for the company, Kristiansen pointed out, is that the offshore wind market is expected to grow this decade at a compound annual growth rate of about 20%. Even with increased competition and saturation of certain markets in the future, Ørsted should realize additional value because of its strong development track record and experience.

Pareto estimates that each gigawatt that Ørsted adds will increase its valuation by more than DKK15 per share and that valuation could reach DK1000 per share over the next couple of years. As for 2021, it is forecast to be “a massive year for tender activity,” added Kristiansen.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: ORSTED:NDAQ; DNNGY:OTCMKTS,
)

Bloom Energy Shares Charge Higher on Partnership with Samsung for Clean Powered Ships

The Energy Report

Source: Streetwise Reports   06/30/2020

Shares of clean fuel cell technology company Bloom Energy traded 30% higher after the firm reported it is advancing plans for clean power ships in a joint development agreement with Samsung Heavy Industries.

Solid oxide fuel cell technology company Bloom Energy Corp. (BE:NYSE) and Samsung Heavy Industries Co. Ltd. (010140:KRX) (SHI), a part of Samsung Group, announced that they “have signed a joint development agreement (JDA) to design and develop fuel cell-powered ships.” The two companies reported that they are partnering to work together toward achieving clean power for ships and creating a more sustainable vessels for the marine shipping industry.

Samsung Heavy Industries’ VP of shipbuilding and drilling sales engineering Haeki Jang commented, “By signing this joint development agreement, SHI has a plan to develop eco-friendly ships that will lead the future of the industry…Our goal is to replace all existing main engines and generator engines with these highly efficient solid oxide fuel cells to align with the International Maritime Organization’s 2030 and 2050 environmental targets.”

The company indicated that SHI will be actively involved in the joint development from start to completion in order to achieve the task of building highly efficient fuel cell-powered ships. In turn, Bloom Energy will deploy its cross-functional engineering team to adapt its servers to the specific requirements relative to the marine environment.

The firm mentioned in the report that the companies are now proceeding with the next milestone in their joint development efforts and hope to be ready to present the design to potential customers in 2022. The company advised that “following commercialization, the two companies anticipate that the market for Bloom Energy Servers on SHI ships could grow to 300 megawatts annually.”

The company noted that this joint project fits well with the International Maritime Organization’s mandatory emissions reduction goals set for 2050.

KR Sridhar, founder, chairman and CEO of Bloom Energy, remarked, “The marine shipping industry has the ability to make a substantial impact on emissions and air quality at ports and across our planet…We see a collaboration with one of the world’s largest shipbuilders, SHI, as a moment to make measurable strides in reducing emissions and extending our mission for clean, reliable energy to the seas.”

Bloom Energy, which is headquartered in San Jose, Calif., stated that “its mission is to make clean, reliable energy affordable for everyone in the world.” The firm stated its clients include several Fortune 100 companies and leaders in data centers, healthcare, higher education, manufacturing, retail, public utilities and other industries. The company explained that that “its product, the Bloom Energy Server, delivers highly reliable and resilient, always-on electric power that is clean, cost-effective, and ideal for microgrid applications.”

Bloom Energy began the day with a market capitalization of around $1.0 billion with approximately 125.2 million shares outstanding. BE shares opened greater than 10% higher today at $9.08 (+$0.86, +10.46%) over yesterday’s $8.22 closing price. The stock has traded today between $9.05 to $10.94 per share and is currently trading at $10.96 (+$2.74, +33.33%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: BE:NYSE,
)

Saudi Arabia Eyes Total Dominance In Oil And Gas

By OilPrice.com

– Saudi Arabia’s Energy Minister Prince Abdulaziz claimed last week that the Kingdom will be the world’s biggest hydrocarbon producer “even” in 2050.

“I can assure that Saudi Arabia will not only be the last producer, but Saudi Arabia will produce every molecule of hydrocarbon and it will put it to good use … It will be done in the most environmentally sound and safe way and the most sustainable way,” Abdulaziz said when asked about the oil market outlook in 2050 during a virtual conference convened by Saudi Arabia’s Future Investment Initiative Institute (FII-I).

Abdulaziz added that Saudi Arabia “will be the last and biggest producer of hydrocarbon even then,” referring to 2050.

But is Saudi Arabia’s the world’s leading hydrocarbon producer now? And what is its legitimate prospect for being the largest hydrocarbon producer in 2050?

‘Hydrocarbon’ Explained

To unpack what the prince is claiming, we first must understand the hydrocarbon classification. A hydrocarbon is an organic compound that contains only carbon and hydrogen. This encompasses petroleum, natural gas, and condensates.

Is Saudi Arabia the world’s largest hydrocarbon producer?

Saudi Arabia’s oil production in 2019, which includes crude oil, all other petroleum liquids, and biofuels–this would include natural gas plant liquids and condensate–was an average of 11.81 million bpd, according to the Energy Information Administration (EIA). At 12% of the world’s total, it’s no wonder why Saudi Arabia holds so much market sway, especially when in cahoots with the rest of the OPEC members.

Russia, too, is right up there, producing an average of 11.49 million bpd, or 11% of the world’s total. This is also no wonder, then, that when you put Russia and Saudi Arabia together to “stabilize” the world’s oil supply to balance it with demand, it creates a crude oil production powerhouse that is unmatched.

But individually speaking, Saudi Arabia is not king of the oil production hill, for its nemesis–the country that sought to undo every production quota OPEC could come up with, is the United States. On its own, the United States produced 19.51 million barrels of oil (and other petroleum liquids) per day, besting both Saudi Arabia and Russia, and controlling 19% of the world’s oil supplies.

The rest of the countries on their own are significantly further down the list, with not one of them producing more than half of third-place Russia. Still, Canada and China–#4 and #5 respectively–are still worth mentioning.

 

But Saudi Arabia expects to be the largest hydrocarbon producer “still” in 2050. If they are not so now, what are the chances they will be so thirty years from now?

Perhaps out of step with Saudi Arabia’s grand Vision 2030 plan, The Kingdom is still hoping to be top dog for petroleum production decades from now.

The EIA, in its Annual Energy Outlook 2020, has forecast that global production of crude oil and lease condensate, natural gas plant liquids, dry natural gas, and coal in the United States will reach 90.29 quadrillion Btus in its reference case. For crude oil and lease condensate, the EIA expects that the United States will be on par with where it is today, in its reference case. For natural gas plant liquids production, the EIA anticipates an increase by 2050.

Source: EIA Annual Energy Outlook 2020

The reason for the EIA assuming oil production will level off in 2022 and holding fairly steady through 2045 is the anticipated decline in well productivity, forcing tight oil producers to hunt for oil is less prolific areas.

For Saudi Arabia, its 30-year hydrocarbon plan or abilities are more of an unknown. It has the world’s second-largest crude oil reserves, and it does have plans to add natural gas production in the coming years as it looks to step away from its near-total reliance on crude oil.

For natural gas, Saudi Arabia announced earlier this year that it may actually bring forward its plans to export natural gas by 2030. It did not, however, provide details about this plan, or how it would be implemented.

But its detail less plans may run into some trouble. For starters, while Saudi Arabia has an excess of low-cost associated gas reserves that it could tap, the production of said gas would be limited to the amount of crude it can produce. And crude oil production is periodically–and profoundly so right now–capped by OPEC agreements that keep the Kingdom’s fossil fuel ambitions in check.

But the EIA sees the OPEC countries besting non-OPEC countries on the production front by 2050

By 2050, the EIA sees the production of crude oil, lease condensate, natural gas plant liquids (NGPLs) and other liquid fuels from 2018 to 2050 reaching 121.5 million barrels per day (b/d) in 2050, or about 21% more than 2018 levels.

For crude oil and lease condensate, the EIA sees OPEC members increasing production by 9.5 million bpd, and non-OPEC countries increasing their crude oil and lease condensate production by 8 million bpd. This translates into a 27% increase for OPEC countries and a 17% increase for non-OPEC countries, according to the EIA’s International Annual Energy Outlook.

Overall, the EIA expects the OPEC countries to produce 56% of total global production in 2050.

Most of that production increase that OPEC nations (27%) will see will come from the Middle East, which is expected to increase by 35% to 2050.

 

 

Meanwhile, production in Russia (14%) and Canada (123%) are expected to increase at a quicker rate than the United States (8%) and Brazil (50%).

Using historical production figures courtesy of BP and forecasts published by peakoilbarrel, the top four oil producers remain in their positions through 2050.

Toeing the Saudi Line

Prince Abdulaziz’s chest-puffing seems to be in line with Saudi Arabia’s previous assertions that oil will be alive and well in 2050 despite attempts to spur the world along an energy transition. Even as far back as 2007, Aramco said it could boost reserves to as many as 1 trillion barrels by 2027, adding that it would be 2050 or later before production peaks.

But some of Saudi Arabia’s forecasts of fossil fuel’s future were more sober-minded, even seeing a phasing out of fossil fuels by the middle of this century, Ali al-Naimi, Saudi Arabia’s oil minister at the time said in 2015.

“In Saudi Arabia, we recognize that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter,” al-Naimi said, adding that Saudi Arabia was therefore planning on becoming a “global power in solar and wind energy.”

Link to original article: https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Eyes-Total-Dominance-In-Oil-And-Gas.html

By Julianne Geiger for Oilprice.com

 

First Crude Inventories Drop In A Month

By Orbex

Huge Inventories Drop

Oil markets managed to retain a positive tone this week as the latest data from the Energy Information Administration offered some support.

The EIA reported that in the week ending June 26th, US crude inventories declined by 7.2 million barrels.

This downward adjustment to inventory levels far exceeded analyst expectations for a 710k barrel drop. It also brings inventory levels down from previous record highs of 540.7 million barrels.

However, despite the move, inventories remain 15% above the five-year seasonal average. This is on the back of the massive drop in demand noted during the worst of the COVID-19 lockdown period.

Imports Reduce

Net US imports were greatly reduced over the week, falling by 506k barrels per day.

Prior to this reading, imports had been one of the key drivers of the rise in inventory levels. This is due to the receipt of shipments booked during the price crash suffered in the Saudi – Russia price war earlier in the year.

Shipments from Saudi Arabia have now fallen back to just 826k barrels per day, their lowest level in six weeks.

Gasoline Demand Low

However, the report was not totally bullish for oil.

Interestingly, gasoline stocks were higher over the week by 1.2 million barrels. This increase came in stark contrast to the 1.6 million barrel drop forecast. This once again reflects a surprising lack of demand given the ongoing reduction in lockdown measures across the US.

Distillate stockpiles, meanwhile, were lower over the week, falling by 593k barrels to 174.1 million barrels.

Elsewhere, the data showed that US refinery crude runs were higher by 193k barrels per day. Refinery utilization rates rose by 0.9%, taking them back up to 75.5% of capacity, the highest they’ve been in months.

Second Wave Fears Threatening Demand

While the headline rise in crude oil inventories is clearly bullish for oil traders, the disappointment at still-weak gasoline demand has offset the positive impact from this report. This created midweek volatility in oil prices.

Alongside this, rising fears of a second outbreak of COVID-19 and the risk that lockdown measures might be reintroduced, have created some headwinds to risk sentiment which are blocking oil’s path to the topside.

With the US seeing a spike in infection numbers, there is a high level of uncertainty in the markets. This could threaten oil’s chances of extending the current recovery in the near term.

Oil Still Capped by 61.8 Retracement

Oil prices have remained below last week’s highs over the course of this week’s trading with price still held up by the 61.8% retracement from the 2020 highs.

RSI divergence is flagging the risks of a reversal unless bulls can quickly see price above the 42.43 level.

If we do see a downside move from here, 33.17 is the first level to watch with the 25.65 level the deeper support zone to note.

By Orbex

Workhorse Group Shares Rise 40% Upon Joining Russell 3000 Index

The Energy Report

Source: Streetwise Reports   06/29/2020

Shares of sustainable electric vehicles maker Workhorse Group reached a new 52-week high after company’s shares were added to the Russell 3000® Index beginning June 29, 2020.

Workhorse Group Inc. (WKHS:NASDAQ) today announced that “its shares were added to the broad-market Russell 3000® Index at the conclusion of the annual reconstitution of the Russell indexes, effective after the U.S. market opens today, June 29, according to the FTSE Russell website.”

The firm stated that “annual Russell indexes reconstitution captures the 4,000 largest U.S. stocks as of May 8, ranking them by total market capitalization. Membership in the U.S. all-cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the large-cap Russell 1000® Index or small-cap Russell 2000® Index as well as the appropriate growth and value style indexes.”

The company’s CEO Duane Hughes commented, “Our inclusion into the Russell 3000 Index represents another milestone for Workhorse as a public company in a year where we expect to make additional landmark achievements in the electric vehicle industry…The Russell Indexes are a widely known and well-respected benchmarking standard. We appreciate being a part of this select group and will look to leverage this platform to generate further interest and awareness in our business within the investment community and beyond.”

The firm noted that Russell indexes are widely and frequently used by investment managers and institutional investors and that around $9 trillion in assets are benchmarked against Russell’s U.S. indexes.

Workhorse Group Inc. is a technology company based in Cincinnati, Ohio, that provides electric vehicles to the last-mile delivery sector. The firm is an original equipment manufacturer (OEM) that designs and builds high performance, battery-electric vehicles including vans, trucks, drones and aircraft. The company advised that “it also develops cloud-based, real-time telematics performance monitoring systems that are fully integrated with our vehicles and enable fleet operators to optimize energy and route efficiency.”

The firm stated that the FTSE Russell indexes cover 98% of the investable markets serving institutional and retail investors globally and that about $16 trillion is currently benchmarked to various FTSE Russell indexes.

Workhorse Group started off the day with a market capitalization of around $699.2 million with approximately 70.63 million shares outstanding and a short interest of about 14.1%. WKHS shares opened 23% higher today at $12.20 (+$2.30, +23.23%) over Friday’s $9.90 closing price and reached a new 52-week high price this morning of $15.41. The stock has traded today between $11.00 to $15.41 per share and is currently trading at $14.04 (+$4.14, +41.79%).

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Combating climate change – why investors should keep their shares in fossil fuel companies

By Adrian R. Bell, University of Reading and Chris Brooks, University of Reading

As we begin to engage with the climate emergency and the impact of carbon dioxide emissions, calls have grown to stop investing in companies engaged in fossil fuel production – a practice known as divestment.

The University of Oxford became one of the latest institutional investors to pledge to drop all fossil fuel companies from their £3 billion endowment. Enormous pressure from students and staff alike has been put on other universities to follow suit, creating a culture of shame on those that continue to hold these shares.

Many scholars in the UK may be horrified to hear that one of the largest university pension schemes, the University Superannuation Scheme (or USS) has the oil company Shell as its largest holding of £500 million. Recent changes to the USS investment strategy ended its investment in a number of controversial holdings, including tobacco manufacturing, coal mining, cluster munitions (a form of explosive) and landmines. But USS continues to invest in a number of fossil fuel companies saying they intend to engage with them as a “force for good”.

So long as they do wield this influence, we believe this is the right approach for investors who want to combat climate change. Many of those lobbying for divestment will have good intentions. Divesting from fossil fuel companies is likely to make investors feel morally cleansed, having washed their hands of dirty investments that make profits from environmental damage. But it may act as a diversion tactic, allowing the lobbyists and investors who follow their lead to feel good about themselves. And yet they will have done little to combat climate change.

Divestment, leading to the selling of fossil fuel company shares, should put downward pressure on the share price, making it harder for the company to raise new capital. But for the majority of them, even in the face of substantial divestments, it will be very much business as usual, having no effect at all on their day-to-day operations.

If more people want to sell shares than buy them, this will affect the share price – but most oil companies are well beyond the situation where it would cause them significant issues. Neither BP nor Shell, for example, are likely to need to raise new financing in the foreseeable future as they have large cash reserves. Both have share repurchase schemes, where they are able to use dips in their share prices to buy their own shares back, allowing investors to benefit without paying taxable dividends.

But if a company’s shares become sufficiently cheap relative to its profit stream, it will be ripe for a takeover. Most likely this will come from an even bigger, non-European oil company or by a wealth fund. It is highly likely in either case that the new purchaser will be less concerned about minimising the company’s environmental impact than those divesting. And any such commitments could easily be dropped in favour of a more concentrated focus on profits.

More worryingly, divestment is highly likely to constitute a small step in a chain of events that will perversely lead to precisely the opposite of the lobbyist’s desired outcome. When the University of Oxford (for example) sells its shares, they won’t simply disappear – rather they will be sold on the market to another investor. And the investors that are actively buying oil shares right now are unlikely to be those who are concerned about the environment.

Shareholder rights

The divestor also gives up the opportunity for shareholder activism – something USS does with the fossil fuel companies in which it holds investments. This is where shareholders can put pressure on companies they part own to introduce more sustainable ways of doing business. Although there is still much to be done, there is growing evidence that this kind of activism is having a positive effect on fossil fuel companies.

Many European oil companies are much better than their peers when it comes to environmental performance. While oil extraction and refinement is by its nature a dirty business, Shell, for instance, has a strong commitment to climate change mitigation. It aims to cut its net carbon footprint by 30% by 2035, and by 65% by 2050, meanwhile increasing the role of renewables in its energy production. Contrast this with some oil majors in the US whose only commitment is to the development of more effective extraction processes and more efficient fuel.

A counter-intuitive strategy for divestment activists would be for them to actually encourage the maintenance of large equity holdings in fossil fuel companies by sympathetic institutional investors, such as universities and USS. Then, by working together with other large shareholders and shareholder activist groups, bring real ownership pressure to bear in order to reduce the polluting activities of these companies. This would work by hitting them where it hurts – for instance, by blocking the awards of executive pay rises and bonuses.

Divestment puts shares in big oil into the hands of those who don’t give two hoots about the climate emergency, discourages such companies from taking mitigating steps and does nothing whatsoever to curb fossil fuel usage. If the question is how to tackle climate change, divestment is not even part of the answer.


About the Authors:

Adrian R. Bell, Chair in the History of Finance and Research Dean, Prosperity and Resilience, Henley Business School, University of Reading and Chris Brooks, Professor of Finance, Henley Business School, University of Reading

This article is republished from The Conversation under a Creative Commons license. Read the original article.