07182018Wed
Last updateWed, 18 Jul 2018 2pm

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Oil and Gas M&A Activity on the Rise

With record-level deal making in the first quarter of 2018, 90% of oil and gas executives now expect the global mergers and acquisitions (M&A) market to improve in the next 12 months, up from 43% in April 2017. That is according to the EY Oil & Gas Global Capital Confidence Barometer, which finds that oil and gas companies represent the highest deal making appetite among all sectors surveyed, with 62% of executives intending to pursue M&A in the next 12 months compared with 52% globally.

Looking ahead, 90% of oil and gas sector executives view global economic growth as improving or stable. However, respondents cite inflation (49%) and market volatility (40%) as the biggest risks to investment plans, amid rising oil prices and oilfield services looking to renegotiate contracts at higher rates. Oil and gas executives also view political uncertainty (54%) and geopolitical tensions (40%) as the two biggest risks to growth. 


President Orders Federal Assistance for Coal, Nuclear Plants

Several energy industry associations including energy efficiency & storage, natural gas, oil, solar and wind are condemning a White House draft plan to subsidize struggling coal and nuclear plants across the country. The administration is using a Cold-War era law that allows the government to intervene in the interest of national security.

"Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation's energy mix, and impacting the resilience of our power grid. President Trump has directed Secretary of Energy Rick Perry to prepare immediate steps to stop the loss of these resources, and looks forward to his recommendations," said the White House in a statement. 

Global Chemicals Production Starts Second Quarter Strong

Data collected and tabulated by the American Chemistry Council (ACC) show that the global chemical industry started the second quarter on a good note. ACC’s Global Chemical Production Regional Index (Global CPRI) shows that global chemicals production rose 0.4% in April following a drop in the first quarter. Note that all data are measured on a three-month moving average (3MMA) basis.

During April, production gains were across the board among regions. The Global CPRI was up 1.1% year-over-year on a 3MMA basis and stood at 114.5% of its average 2012 levels in April. During April, capacity utilization in the global chemical industry gained 0.2% to 84.3%. This is down from 85.7% last April and below the long-term average of 86.5%. 

U.S. Chemical Production Edged Higher in April

According to the American Chemistry Council, the U.S. chemical production expanded by 1.0% in April, following a 0.2% decline in March, and a 1.0% decline in February, as measured on a three-month moving average basis. During April, chemical output moved higher in all regions. The Southeast, Gulf Coast, and Ohio Valley regions posted the highest growth during the month. Chemical production was mixed over the same three-month period.

There were gains in the production three-month moving average output trend of plastic resins, adhesives, industrial gases, basic inorganic chemicals, organic chemicals, synthetic dyes and pigments, coatings, fertilizers, pesticides, chlor-alkali, other specialty chemicals and consumer products. These gains were offset by declines in the output trend in synthetic rubber. 

Shell Adds Deep-Water Production in Gulf of Mexico

Shell has started early production – around one-year ahead of schedule – of the first phase of Kaikias, a subsea development in the Gulf of Mexico with estimated peak production of 40,000 barrels of oil equivalent per day (boe/d). Cycle time from discovery to production for Kaikias phase one is estimated to be less than four years.

Kaikias is located in the Mars-Ursa basin around 130 miles from the Louisiana coast and is owned by Shell (80% working interest), as operator, and MOEX North America LLC (20% working interest), a wholly owned subsidiary of Mitsui Oil Exploration Co., Ltd. 

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