Energy giant to cut spending on finding and developing new oil and gas reserves
BP is cutting spending on new projects after suffering a 62% drop in profits following the slump in the oil price.
The energy giant reported this morning that it made a profit of $2.387bn (£1.64bn) in the first three months of this year, down from $6.231bn a year ago. It blamed the fall in the price of oil, which fluctuated between $35 and $50 a barrel during the quarter, while a year ago a barrel cost more than $100.
With profits also lower than in the last three months of 2008, when BP made $2.587bn, the company is now planning to spend less on finding and developing new oil and gas reserves. It warned today that it will spend less than $20bn on capital expenditure this year, down from an earlier target of $20bn-$22bn. This comes after Opec, the group of oil-producing nations, threatened to cut production unless the oil price rose soon.
The cut in capital expenditure could have long-term consequences for BP's future growth. It is not clear which projects will be affected by the cutbacks, but environmentalists are likely to welcome the move, given the controversy over projects such as the tar sands scheme in Canada.
The move comes less than a month after BP said it will reduce the headcount at its solar power division by 620, or nearly a quarter, in a cost-cutting drive.
BP today also reported a drop in sales at its solar division, which makes solar panels. Its sales during the quarter would generate 15 megawatts of power, down from 34 MW in the same period in 2008. BP said this reflected "ongoing weak demand in the market".
Shareholders will receive a dividend of 14 cents per share, the same as in the last quarter and nearly half a cent more than a year ago.
Shares in BP rose by 3p this morning to 486.25p.
Source - The guardian
Showing posts with label BP. Show all posts
Showing posts with label BP. Show all posts
Wednesday, 29 April 2009
Wednesday, 1 April 2009
BP axes 620 jobs from solar business
BP is to axe 620 jobs from its solar power business – more than a quarter of that workforce – in a move it said was part of the long-term strategy to "reduce the cost of solar power to that of conventional electricity."
Two cell manufacture and module assembly plants near Madrid, will be shut with the loss of 480 posts while module assembly will also be phased out at its Frederick facility in Maryland, US, with a further 140 redundancies.
BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies.
"We deeply regret the impact of this business decision on our employees and the local communities," said Reyad Fezzani, chief executive of BP Solar. "We have a long history at both the Madrid and Frederick sites. Competitive hi-tech manufacturing of ingots, wafers and cells will continue at Frederick. Engineering, technology product development, sales and marketing and other business support functions will also remain at both Frederick and Madrid."
He said solar markets had been "unsettled by the impact of the global economic environment", adding that the market had been over-supplied as competition increased and prices had fallen.
Fezzani said the cuts would lead to lower prices for solar power: "The decision is part of the long term strategy to reduce the cost of solar power to that of conventional electricity."
The decision by a cash-rich oil group to reduce its direct manufacturing capacity and cut 620 out of 2,200 jobs will raise further questions about whether BP is retreating back to its core hydrocarbon business despite marketing promises to go "beyond petroleum." The London-based company said last year it was going to concentrate its alternative energy business on wind and solar in the US, while rival Shell has also been cutting back.
The moves will also send further shock waves through the wider renewable energy sector which is reeling from a retreat by the banks from higher risk investments such as green power schemes.
Andrew Mill, who sits on the UK government's Renewables Advisory Board, told the Guardian 10 days ago that the renewables sector was heading for crisis and British ministers' climate change targets would not be met. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The UK is a relatively small solar market and will rely largely on wind to meet its goal of producing 15% of its energy from renewables by 2020.
Source - The guardian
Two cell manufacture and module assembly plants near Madrid, will be shut with the loss of 480 posts while module assembly will also be phased out at its Frederick facility in Maryland, US, with a further 140 redundancies.
BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies.
"We deeply regret the impact of this business decision on our employees and the local communities," said Reyad Fezzani, chief executive of BP Solar. "We have a long history at both the Madrid and Frederick sites. Competitive hi-tech manufacturing of ingots, wafers and cells will continue at Frederick. Engineering, technology product development, sales and marketing and other business support functions will also remain at both Frederick and Madrid."
He said solar markets had been "unsettled by the impact of the global economic environment", adding that the market had been over-supplied as competition increased and prices had fallen.
Fezzani said the cuts would lead to lower prices for solar power: "The decision is part of the long term strategy to reduce the cost of solar power to that of conventional electricity."
The decision by a cash-rich oil group to reduce its direct manufacturing capacity and cut 620 out of 2,200 jobs will raise further questions about whether BP is retreating back to its core hydrocarbon business despite marketing promises to go "beyond petroleum." The London-based company said last year it was going to concentrate its alternative energy business on wind and solar in the US, while rival Shell has also been cutting back.
The moves will also send further shock waves through the wider renewable energy sector which is reeling from a retreat by the banks from higher risk investments such as green power schemes.
Andrew Mill, who sits on the UK government's Renewables Advisory Board, told the Guardian 10 days ago that the renewables sector was heading for crisis and British ministers' climate change targets would not be met. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The UK is a relatively small solar market and will rely largely on wind to meet its goal of producing 15% of its energy from renewables by 2020.
Source - The guardian
Tuesday, 21 October 2008
Welcome to the solar panels century
Often described as the sleeping giant of renewable energy, solar heating technologies have been a woefully overlooked option to massively increase the renewable contribution to energy supply. However, with superb efficiency and a wide range of applications, the technologies that make up the solar thermal sector are indeed making inroads to the market.
With a surface temperature of some 6000°C, the colossal fusion reactor that is our sun radiates truly prodigious amounts of energy. Indeed, so much power is emitted that, residing some 93 million miles away, the upper atmosphere of the Earth continuously receives an average of around 1.4 kW/m².
After passing through the atmosphere, the light reaching the surface of the Earth is mostly split between the visible and infrared spectrum, but of the energy which remains, the atmosphere, oceans and land masses absorb approximately 3850 ZJ (x1021) per annum. By way of perspective, total global energy consumption is currently estimated at around 500 EJ (x1018).
It is therefore somewhat surprising that use of direct solar radiation has not focused more closely on solar thermal technology. In terms of investment, significantly larger sums worldwide are ploughed into solar PV technology. This is partly due to the relative investment requirements necessary to initiate production. The comparatively simple technologies and materials required in solar thermal systems have allowed small and medium enterprises to dominate the sector. Conversely, the high investment costs associated with solar PV manufacturing have largely precluded smaller players from entering the market and left the field dominated by major industrial operations such as Sharp or BP.
Nonetheless, the relative levels of R&D and manufacturing investment between PV and solar thermal become even more surprising when considered in terms of their relative energy efficiencies. Experimental PV systems are currently yielding maximum efficiencies of over 30%, while the most efficient commercially available solar thermal technologies are yielding efficiencies of approximately 70% under optimum conditions for load, positioning, temperature and such like. It is no surprise that solar thermal is frequently referred to as ‘the sleeping giant of renewables’ by its proponents.
There is no dispute that solar thermal has a vast potential to improve the renewable energy contribution of many nations, but this goal remains some distance away. Part of the issue is the widespread perception that solar thermal technologies are only suitable for those regions with high-intensity insolation. This is a misconception. For instance, as Kevin Brennan, head of sustainability for Velux, says: ‘Currently only 0.004% of the UK’s housing stock has solar water heating, yet over 76% of homes in this country could successfully make use of this technology.’ Brennan continues: ‘While installing solar thermal in all homes across the UK could prove a challenging task, a commitment from housebuilders to incorporate this technology into all of their new builds could still have a significant impact on reducing the UK’s carbon emissions. Within 30 years, the new homes being built today by housebuilders will be approximately 30% of the entire housing stock, so even small gains today will be significant gains in 30 years time.’
Even so, while it may not have achieved even close to the penetration level its efficiency, simplicity and cost-effectiveness may warrant, there is cause for optimism.
A major boost for the industry is the projected development of new, cheaper, materials. While rising prices in copper have seen a number of manufacturers switching to cheaper and lighter aluminium as an absorber surface, the use of alternatives such as polymers is also attracting a great deal of interest.
Although current generation plastics tend to become brittle under high levels of sun exposure and also tend to suffer in an overheat scenario, there has been progress and such developments are expected to dramatically reduce the cost of solar thermal systems in the next few years.
In addition, a number of large buildings material and equipment companies such as Vaillant, and Buderus, part of Bosch Thermotechnology Ltd, have introduced solar thermal packages of late. There is growing interest among developers too, with a number of recent acquisitions by larger renewables players, now ready to offer a full range of technologies. For example, Renewable Energy Systems Ltd (RES) announced the acquisition of solar thermal company Future Heating Ltd this year.
Policy drivers related to climate change are also having an impact, with the forthcoming EU Renewable Energy Directive raising the profile of solar thermal among commercial, industrial and commercial operations.
Perhaps most fundamental to the growth of solar thermal installation, the issues of energy security of supply and the spiralling costs of fossil fuels are certain to improve the economics of alternatives.
However, it should also be remembered that solar heating and cooling technology is nothing new. In the 1870s, French solar pioneer Auguste Mouchout demonstrated its potential by making ice using a solar steam engine attached to a refrigeration compressor. Despite this remarkable success, his project was abandoned shortly thereafter as falling coal prices rendered it uneconomic.
Times have certainly changed, and once again it seems that the conditions are right for solar thermal to come out from the shade.
Source - Renewable energy world
With a surface temperature of some 6000°C, the colossal fusion reactor that is our sun radiates truly prodigious amounts of energy. Indeed, so much power is emitted that, residing some 93 million miles away, the upper atmosphere of the Earth continuously receives an average of around 1.4 kW/m².
After passing through the atmosphere, the light reaching the surface of the Earth is mostly split between the visible and infrared spectrum, but of the energy which remains, the atmosphere, oceans and land masses absorb approximately 3850 ZJ (x1021) per annum. By way of perspective, total global energy consumption is currently estimated at around 500 EJ (x1018).
It is therefore somewhat surprising that use of direct solar radiation has not focused more closely on solar thermal technology. In terms of investment, significantly larger sums worldwide are ploughed into solar PV technology. This is partly due to the relative investment requirements necessary to initiate production. The comparatively simple technologies and materials required in solar thermal systems have allowed small and medium enterprises to dominate the sector. Conversely, the high investment costs associated with solar PV manufacturing have largely precluded smaller players from entering the market and left the field dominated by major industrial operations such as Sharp or BP.
Nonetheless, the relative levels of R&D and manufacturing investment between PV and solar thermal become even more surprising when considered in terms of their relative energy efficiencies. Experimental PV systems are currently yielding maximum efficiencies of over 30%, while the most efficient commercially available solar thermal technologies are yielding efficiencies of approximately 70% under optimum conditions for load, positioning, temperature and such like. It is no surprise that solar thermal is frequently referred to as ‘the sleeping giant of renewables’ by its proponents.
There is no dispute that solar thermal has a vast potential to improve the renewable energy contribution of many nations, but this goal remains some distance away. Part of the issue is the widespread perception that solar thermal technologies are only suitable for those regions with high-intensity insolation. This is a misconception. For instance, as Kevin Brennan, head of sustainability for Velux, says: ‘Currently only 0.004% of the UK’s housing stock has solar water heating, yet over 76% of homes in this country could successfully make use of this technology.’ Brennan continues: ‘While installing solar thermal in all homes across the UK could prove a challenging task, a commitment from housebuilders to incorporate this technology into all of their new builds could still have a significant impact on reducing the UK’s carbon emissions. Within 30 years, the new homes being built today by housebuilders will be approximately 30% of the entire housing stock, so even small gains today will be significant gains in 30 years time.’
Even so, while it may not have achieved even close to the penetration level its efficiency, simplicity and cost-effectiveness may warrant, there is cause for optimism.
A major boost for the industry is the projected development of new, cheaper, materials. While rising prices in copper have seen a number of manufacturers switching to cheaper and lighter aluminium as an absorber surface, the use of alternatives such as polymers is also attracting a great deal of interest.
Although current generation plastics tend to become brittle under high levels of sun exposure and also tend to suffer in an overheat scenario, there has been progress and such developments are expected to dramatically reduce the cost of solar thermal systems in the next few years.
In addition, a number of large buildings material and equipment companies such as Vaillant, and Buderus, part of Bosch Thermotechnology Ltd, have introduced solar thermal packages of late. There is growing interest among developers too, with a number of recent acquisitions by larger renewables players, now ready to offer a full range of technologies. For example, Renewable Energy Systems Ltd (RES) announced the acquisition of solar thermal company Future Heating Ltd this year.
Policy drivers related to climate change are also having an impact, with the forthcoming EU Renewable Energy Directive raising the profile of solar thermal among commercial, industrial and commercial operations.
Perhaps most fundamental to the growth of solar thermal installation, the issues of energy security of supply and the spiralling costs of fossil fuels are certain to improve the economics of alternatives.
However, it should also be remembered that solar heating and cooling technology is nothing new. In the 1870s, French solar pioneer Auguste Mouchout demonstrated its potential by making ice using a solar steam engine attached to a refrigeration compressor. Despite this remarkable success, his project was abandoned shortly thereafter as falling coal prices rendered it uneconomic.
Times have certainly changed, and once again it seems that the conditions are right for solar thermal to come out from the shade.
Source - Renewable energy world
Wednesday, 30 July 2008
The energy bubble has burst when you need tar sands
Shell, BP and other oil companies at the centre of the tar sands revolution in Canada are facing a backlash from the Co-operative and other members of the ethical investment community determined to bring a halt to these operations for environmental reasons.
A joint report from Co-operative Investments and the wildlife charity WWF released today will be followed up in September by a meeting of the UK Social Investment Forum (UKSIF) to press for an end to this carbon-intensive activity.
The tar sands business, by which crude oil is produced through highly carbon and water-intensive extraction and treatment procedures, risks tipping the world into an irreversible process of global warming, critics claim.
The Co-op and WWF are calling for a global halt to new licensing for tar sands and similar oil operations known as “unconventional fuels”.
They want the UK and other countries to prohibit the sale and distribution of any oil products with higher emissions than traditional petrol.
The move comes as Shell and other industry leaders have pledged to spend more than $125bn (£63bn) by 2015 to develop these new sources of petrol at a time of very high crude prices and fears of supply shortages.
The oil companies say the world needs these reserves, which are expensive to produce but are located in a politically stable area, unlike the traditional reserves of the Middle East or Russia. But critics say the environmental price is disastrous.
Paul Monaghan, head of social goals and sustainability at the Co-op group, said: “The current rush to invest in unconventional fossil fuels is wholly inappropriate and, due to their carbon intensity, these projects risk dangerous levels of climate change.”
The new report, Unconventional Oil: Scraping the Bottom of the Barrel, will be used as the basis for discussion with the Co-op’s 6.5 million customers and for garnering support from more than 200 other members of the UKSIF.
James Leaton, senior policy officer at WWF-UK, said: “Unconventional fuel sources may seem attractive in the short term but ultimately the environmental and economic costs are unthinkable.
“Companies and investors claim to recognise the need to tackle climate change and support international efforts such as Kyoto [climate change protocol]. In oil sands we have an activity that is going against this imperative and undermining Canada’s Kyoto commitments, so it is time for investors to challenge this strategy.”
Shell said: “The global demand for energy is growing. This will mean greater demand for oil and gas, too. Supplies of accessible, conventional oil and gas cannot keep up with the demand growth. As a result, society has little choice but to add other sources of energy including ‘unconventional’ fuels like oil sands.”
BP said fossil fuels were still going to be needed well into the future even if there were tough restrictions on carbon dioxide emissions.
“Reserves of oil sands represent a significant untapped resource from a politically stable country. The Husky joint venture [BP is planning] will use a process known as steam-assisted gravity drainage, not mining, which produces oil in-situ with a significant reduction of both water use and overall environmental footprint,” it said in a statement.
BP added that it was a “keen” supporter of mandatory market mechanisms such as cap-and-trade programmes on greenhouse gases: “We support national and international trading programmes and have factored the future costs of carbon in our analysis of the project’s value.”
Source - The guardian
A joint report from Co-operative Investments and the wildlife charity WWF released today will be followed up in September by a meeting of the UK Social Investment Forum (UKSIF) to press for an end to this carbon-intensive activity.
The tar sands business, by which crude oil is produced through highly carbon and water-intensive extraction and treatment procedures, risks tipping the world into an irreversible process of global warming, critics claim.
The Co-op and WWF are calling for a global halt to new licensing for tar sands and similar oil operations known as “unconventional fuels”.
They want the UK and other countries to prohibit the sale and distribution of any oil products with higher emissions than traditional petrol.
The move comes as Shell and other industry leaders have pledged to spend more than $125bn (£63bn) by 2015 to develop these new sources of petrol at a time of very high crude prices and fears of supply shortages.
The oil companies say the world needs these reserves, which are expensive to produce but are located in a politically stable area, unlike the traditional reserves of the Middle East or Russia. But critics say the environmental price is disastrous.
Paul Monaghan, head of social goals and sustainability at the Co-op group, said: “The current rush to invest in unconventional fossil fuels is wholly inappropriate and, due to their carbon intensity, these projects risk dangerous levels of climate change.”
The new report, Unconventional Oil: Scraping the Bottom of the Barrel, will be used as the basis for discussion with the Co-op’s 6.5 million customers and for garnering support from more than 200 other members of the UKSIF.
James Leaton, senior policy officer at WWF-UK, said: “Unconventional fuel sources may seem attractive in the short term but ultimately the environmental and economic costs are unthinkable.
“Companies and investors claim to recognise the need to tackle climate change and support international efforts such as Kyoto [climate change protocol]. In oil sands we have an activity that is going against this imperative and undermining Canada’s Kyoto commitments, so it is time for investors to challenge this strategy.”
Shell said: “The global demand for energy is growing. This will mean greater demand for oil and gas, too. Supplies of accessible, conventional oil and gas cannot keep up with the demand growth. As a result, society has little choice but to add other sources of energy including ‘unconventional’ fuels like oil sands.”
BP said fossil fuels were still going to be needed well into the future even if there were tough restrictions on carbon dioxide emissions.
“Reserves of oil sands represent a significant untapped resource from a politically stable country. The Husky joint venture [BP is planning] will use a process known as steam-assisted gravity drainage, not mining, which produces oil in-situ with a significant reduction of both water use and overall environmental footprint,” it said in a statement.
BP added that it was a “keen” supporter of mandatory market mechanisms such as cap-and-trade programmes on greenhouse gases: “We support national and international trading programmes and have factored the future costs of carbon in our analysis of the project’s value.”
Source - The guardian
Saturday, 14 June 2008
Oil price to hit $250 in 2009 - Gazprom
The Russians undermined Opec’s attempts to talk down the oil market yesterday by warning that crude prices could almost double to $250 a barrel within 18 months.
The prediction from Alexey Miller, chairman of Gazprom, came as the price of oil leaped $2.75 to $137.10 a barrel even though Opec insisted everyone was already “panicking” unnecessarily and stressed there were no shortages.
The soaring value of crude yesterday pushed British wholesale gas prices to new record highs of 100.75p per therm for next winter deliveries. This will put pressure on domestic heating bills, while the current price of motor diesel has already reached £1.30 a litre.
Gazprom said the higher crude prices it expected would drag gas values up too. “We think it [oil] will reach $250 a barrel in the foreseeable future,” said Miller, insisting that high demand rather than financial speculation was the primary factor, an argument that runs counter to that put forward by Opec.
The comments came 24 hours after Tony Hayward, the BP chief executive, said supply constraints were partly responsible for the very high crude prices so far.
A spokesman for Gazprom, which is also one of Russia’s largest crude producers, expected the price to hit $250 some time in 2009. The company exports gas to Europe at prices linked to oil products for historic reasons and Miller said the current gas price was $410 per 1,000 cubic metres.
Analysts said the latest Russian energy estimates were hard to support and noted they were not backed up with specified research data. “It’s crazy… maybe they know something we don’t,” said one. Abdullah al-Badri, the secretary general of Opec, had earlier appealed for calm. “Really we need some calm. We are panicking too much,” Badri told a global energy summit. “The situation is unbearable as far as we are concerned. I want to say, there is no shortage now and in the future.”
Saudi Arabia said on Monday it would soon call for a meeting to discuss what it called unjustified rises in prices.
Badri supported holding such a meeting, which he said might happen before the next scheduled Opec gathering on September 9. He hoped that measures could be taken to curb speculation in the oil market, a factor Opec believes is inflating prices to levels not justified by supply and demand.
“We are not happy with the current level of price for one reason. It has nothing to do with the fundamentals,” he said.
“Speculators are playing a big role in high oil prices. Also there are other considerations, the value of the dollar and the geopolitical situation.”
Source - The Guardian
The prediction from Alexey Miller, chairman of Gazprom, came as the price of oil leaped $2.75 to $137.10 a barrel even though Opec insisted everyone was already “panicking” unnecessarily and stressed there were no shortages.
The soaring value of crude yesterday pushed British wholesale gas prices to new record highs of 100.75p per therm for next winter deliveries. This will put pressure on domestic heating bills, while the current price of motor diesel has already reached £1.30 a litre.
Gazprom said the higher crude prices it expected would drag gas values up too. “We think it [oil] will reach $250 a barrel in the foreseeable future,” said Miller, insisting that high demand rather than financial speculation was the primary factor, an argument that runs counter to that put forward by Opec.
The comments came 24 hours after Tony Hayward, the BP chief executive, said supply constraints were partly responsible for the very high crude prices so far.
A spokesman for Gazprom, which is also one of Russia’s largest crude producers, expected the price to hit $250 some time in 2009. The company exports gas to Europe at prices linked to oil products for historic reasons and Miller said the current gas price was $410 per 1,000 cubic metres.
Analysts said the latest Russian energy estimates were hard to support and noted they were not backed up with specified research data. “It’s crazy… maybe they know something we don’t,” said one. Abdullah al-Badri, the secretary general of Opec, had earlier appealed for calm. “Really we need some calm. We are panicking too much,” Badri told a global energy summit. “The situation is unbearable as far as we are concerned. I want to say, there is no shortage now and in the future.”
Saudi Arabia said on Monday it would soon call for a meeting to discuss what it called unjustified rises in prices.
Badri supported holding such a meeting, which he said might happen before the next scheduled Opec gathering on September 9. He hoped that measures could be taken to curb speculation in the oil market, a factor Opec believes is inflating prices to levels not justified by supply and demand.
“We are not happy with the current level of price for one reason. It has nothing to do with the fundamentals,” he said.
“Speculators are playing a big role in high oil prices. Also there are other considerations, the value of the dollar and the geopolitical situation.”
Source - The Guardian
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