BP SQUEEZES ITS BREAKEVEN BELOW $50 A BARREL
BP PLC on Tuesday got back in the game by returning to profit in the second quarter, aided by slightly higher oil prices than last year and cost cuts, reports The Wall Street Journal’s Michael Amon.
The British energy giant ramped up its oil-and-gas production by almost 10% compared with a year ago and enacted $7 billion in cost cuts, which has resulted in a leaner firm.
It now needs a break-even oil price of $47 a barrel and is planning to go even lower in the future.
BP Chief Executive Bob Dudley said oil prices still presented a “tough environment.” But he sounded a rare note of optimism, calling $50 a barrel “a pretty good fairway for us going forward.”
“BP reported replacement cost profit—a similar measure to the net income that U.S. oil companies report—of $553 million for the quarter, compared with a loss of $2.2 billion a year earlier. Brent crude, the international benchmark, averaged $49.64 in that period this year, compared with $45.59 last year,” the Journal reports.
The British energy giant is still haunted by the financial fallout from the 2010 explosion on the Deepwater Horizon oil rig in the Gulf of Mexico that killed 11 workers and spilled millions of barrels of oil into the ocean. The firm reached a $20 billion settlement with U.S. authorities in 2015.
U.S. WEIGHS SANCTIONS AGAINST VENEZUELA’S OIL INDUSTRY
U.S. government officials are considering stepping up sanctions against Venezuela by targeting its vital oil industry, write Christopher M. Matthews and José de Córdoba.
Following a vote that would allow the embattled Venezuelan President Nicolás Maduro and a new assembly broad powers to rewrite the constitution, Washington is considering making it more difficult for Venezuela to import refined petroleum products from the U.S.
The toughest of possible sanctions—an embargo on imports of Venezuelan oil could be considered later, say sources.
Last week, the U.S. government levied sanctions on 13 high-ranking Venezuelan officials for alleged corruption, human-rights violations and undermining democracy in the South American country.
ALPHABET SEES POWER IN MOLTEN SALT
Google parent Alphabet Inc. wants to store power from renewable energy in tanks of molten salt and cold liquid, reports Jack Nicas.
“Alphabet’s research lab, dubbed X, said it has developed plans to store electricity generated from solar panels or wind turbines as thermal energy in hot salt and cold liquids, such as antifreeze. The lab is seeking partners in the energy industry, including power-plant developers and utilities, to build a prototype to plug into the electrical grid,” the Journal reports.
Storing electricity is very important because of the advent of renewable energy.
Finding a cost effective way to store solar and wind power during times of surplus or deficits and deploy it when needed is the holy grail in the power industry.
Oil prices edged down on Tuesday, following a week of straight gains that brought the global oil benchmark above $50 a barrel for the first time in two months, amid growing optimism that the market is tightening.
Brent crude, the global oil benchmark, fell 0.51% to $52.45 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.26% at $50.04 a barrel.