What to Watch

BP Books $1.7 Billion Charge for Gulf Disaster Claims

 The fallout from the Deepwater Horizon accident is still taking a toll on BP PLC’s bottom line, writes Sarah Kent.

The British oil giant said Tuesday it would take a $1.7 billion charge in its fourth-quarter earnings because of settlement claims related to the 2010 Gulf of Mexico blowout that killed 11 people and unleashed the worst offshore oil spill in American history.

The payout will add to a disaster bill that BP last estimated at over $63 billion, a toll that continues to mount years after the company’s $20 billion settlement in 2015 with the U.S. government. BP said the U.S. court-supervised settlement program is nearing its close.

BP’s fourth-quarter profits are now under threat because the company has already announced a separate $1.5 billion accounting charge related to the U.S. tax overhaul. The firm will publish its fourth quarter results Feb. 6.

Energy News

Oil Market Conquers Its Fears Over Shale

Oil prices have surged more than 50% since the summer—a sign investors are reassessing what was once the biggest risk in the market: U.S. shale.

Meanwhile, oil prices trended down Tuesday morning, even as they largely sustained gains that have brought crude futures to three-year highs. Brent crude, the global benchmark, edged down 0.80% to $69.70 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down slightly, by 0.09%, at $64.25 a barrel.

U.S. Oil Industry Set to Break Record, Upend Global Trade

Surging shale production is poised to push U.S. oil output to more than 10 million barrels per day–toppling a record set in 1970. But this new record, expected within days, likely won’t last long.

“The market now is not 100 percent stable”

Jabar al-Luaibi, the Minister of Oil for Iraq

Singapore Files More Charges Against Shell Oil Theft Suspects

A Singapore court on Monday filed additional charges against nine men accused in a large-scale oil theft at Shell’s biggest refinery.

WSJ Energy In-Depth

Shell Bids a Long Goodbye to Middle Eastern Oil

 Royal Dutch Shell PLC is giving up on its last oil fields in Iraq, leaving the world’s second-biggest oil company with a dwindling footprint in the Middle East—a region it helped build into a petroleum powerhouse, write Sarah Kent and Benoit Faucon.

Shell’s departure from Iraqi oil assets marks one of the final chapters in a slow pullback from the Middle East’s vast fields of petroleum. The firm pumped as much as 450,000 barrels of oil in 2003 in the region.

Shell’s retreat reflects the waning attraction of the Middle East’s once-prized oil reserves, as companies find that the free flow of crude in the region often comes at a political or financial cost.

Shell said Monday it is selling for an undisclosed amount a stake in the West Qurna 1 oil field in Iraq to Japan’s Itochu Corp. The company is also expected to give up its holding in Iraq’s Majnoon oil field later this year.

The company is keeping its considerable natural-gas interests in Middle Eastern countries, including Iraq, Qatar, Oman and Egypt.

Big Number

45,000

Royal Dutch Shell is moving ahead with an expansion of the Penguins oil and gas field in the U.K. North Sea, its first major new project in the ageing basin in six years. The development includes the construction of a floating production, storage and offloading vessel expected to produce up to 45,000 barrels of oil equivalent per day.

FutureCurve

Today: The American Petroleum Institute releases its forecast of U.S. crude inventories.

Wednesday: The U.S. Energy Information Administration releases its weekly petroleum status report.

Monday: Chatham House in London holds its 2018 energy conference Jan. 29-30. Invited speakers include Claudio Descalzi, CEO of Italy’s Eni, Jabar Ali al-Luaibi the minister of oil for Iraq and Mustafa Sanalla, chairman of the National Oil Corporation of Libya.

Reporter’s Notebook

WSJ reporter Christopher Matthews on personnel changes in the oil industry. Noble Corp. announced late Thursday that President, CEO and Chairman David Williams will retire in February. The offshore driller said he would be succeeded by Julie Robertson, an executive vice president at Noble. Energy-industry investment bank Simmons & Company called the move “surprisingly abrupt.” Like most of the offshore drilling industry, Noble struggled over the last two years as oil prices plummeted but is hoping their recent upswing portends brighter prospects.

WSJ correspondent Erin Ailworth on closures in the nuclear power industry. The shuttering of PG&E’s 2,240-megawatt nuclear power plant in California, called Diablo Canyon, is looking like it will cost ratepayers more than $200 million. The California Public Utilities Commission is slated to vote on Diablo Canyon’s closure Thursday, and a proposed decision recommends PG&E be allowed to recover $241.2 million from ratepayers to cover the costs of retiring both of the plant’s units by 2025. Most of that money would be used for employee retention and retraining. Just how the nuclear power plant’s electricity generating capacity will be replaced has not yet been decided.