Total sets its sights on nuclear energy

Total, the French energy group, has begun to eye nuclear energy as access to oil and gas becomes more restricted in countries reluctant to allow foreign investment in their most precious resource.

Christophe de Margerie, who will take over as Total's chief executive this month, will continue to focus on the hunt for hydrocarbons - gas and oil - something he is well known for in the industry. But in an interview he revealed his nuclear ambitions. "Being in the energy business, [which] we consider not only as our business but also as a responsibility vis a vis the consumers, we will certainly one day have to be part of this [nuclear] adventure," he said.

Although it was not an immediate concern, he said, as access to hydrocarbons became more difficult, Total was branching out into other forms of energy. Renewables would only ever satisfy a small portion of the world's overall energy needs, even though they would be important sources in certain countries that lacked oil and gas. So for Total, "if it is not hydrocarbons, if it is not renewables, if it is not nuclear, what is it"?

- Are the "oil majors" going to morph into "nuclear majors"? Looks like Total might lead the way. After all, the French are already 80% nuclear, in terms of electricity production. Meanwhile, Shell is turning into an "oil sands major" with their big Canadian project, and BP is trying to become a "solar major".

As the availability of crude oil declines, the big oil companies are going to be less and less about oil, and more and more about other forms of energy. They refer to themselves as "energy companies" nowadays. BP has re-branded itself as "Beyond Petroleum" instead of "British Petroleum". It is telling.

(2007-02-06 18:58:45 SGT) [Energy] Permalink

Exxon sets annual profit record of $39.5 billion

money.cnn.com :

Exxon Mobil reported the biggest annual profit on record for a U.S. corporation - earning more than $75,000 every minute of 2006 on the back of record oil prices.

The world's biggest publicly traded company by revenue posted net earnings of $39.5 billion on revenue of $377.6 billion last year, topping its previous profit record of $36.1 billion in 2005, which at the time was the largest for any U.S. company. Out of Exxon's $377.6 billion in revenue, the company said it spent $19.9 billion on exploration and production to bring new oil to market, a 12% increase over 2005.

Industry analysts noted that despite growing demand, Western oil companies have struggled to increase production. High oil prices have driven up demand for drilling rigs and experienced workers, which has boosted the cost of finding new oil. And much of the world's remaining reserves lie in politically unstable areas or countries that are simply off-limits to foreign firms.

Shell posts record $25.4 billion profit

today.reuters.co.uk :

Royal Dutch Shell posted record annual profits, beating forecasts, but analysts warned rising costs, lower oil prices and refining margins and reduced growth targets could curb future earnings.

Shell said its fourth-quarter current cost of supply (CCS) net profit, which strips out changes in the value of inventory, rose 11% to $6 billion (3 billion pounds), thanks to higher output, strong oil prices and profit from disposals. For 2006 as a whole, CCS profit was up 12% at $25.4 billion, a UK corporate record.

Shell's reserves replacement ratio (RRR), the rate at which it matches production with new finds, was 150 percent in 2006, including oil-sands projects, after years of failing to hit the desired minimum 100 percent target. However, other analysts were concerned that Shell was relying on low margin projects to boost reserves. Chief Financial Officer Peter Voser said over half the reserves additions were related to oil sands projects, which involve extracting bitumen from tarry sands and then processing this into crude, and a project in Qatar which converts natural gas into diesel.

- Yet another round of record-setting profits, but look at the last paragraph, particularly the sections highlighted in bold. When the oil majors turn to unconventional sources to boost their reserves like this, we should be getting worried.

(2007-02-06 13:23:18 SGT) [Energy] Permalink

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