BP and Shell post big profits in era of record oil prices

BP and Shell post big profits in era of record oil prices

By JANE WARDELL, AP Business Writer
Tue Apr 29, 12:36 PM ET

BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted forecast-busting first-quarter earnings on Tuesday thanks to record crude oil prices that are expected to bolster profits across the industry.

The combined profits of $17 billion reignited calls for a windfall tax on oil profits as consumers struggle to pay for food and fuel.

British Prime Minister Gordon Brown suggested that some of those profits should be reinvested in costly exploration for new oil reserves in the North Sea.

BP posted a 63 percent surge in first-quarter net profit to $7.6 billion (4.9 billion euros), while Shell reported a 25 percent rise, to a record $9.08 billion (5.81 billion euros).

Revenue at BP jumped 44 percent to $89.2 billion (57.1 billion euros), while sales at Shell soared 55 percent to $114 billion (72.95 billion euros).

Last week ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. producer far outpaced industry expectations. More big profits are expected from the biggest two U.S. companies, Exxon Mobil Corp. and Chevron Corp., when they report first-quarter earnings later this week.

Crude oil hit $111.80 per barrel during the quarter, while gas jumped an average of 22 percent. Crude has pushed even higher since, reaching a record $119.93 per-barrel this week.

BP shares jumped 6 percent to 613 pence ($12.18), while Shell rose 4.5 percent to 25.83 euros ($40.39).

The enormous profit reports from European companies coincided with the end of a two-day refinery strike in Britain that shut off 700,000 barrels of oil per day, brought from the North Sea to a BP plant.

Truck drivers staged a protest in London's Park Lane on Tuesday, blaring their horns to protest a 30 percent rise in the price of diesel over the past year. A similar protest took place in Washington, D.C. on Monday, and it wasn't the first.

"The price of fuel is becoming something many families are struggling with," said Sheila Ranger, a spokeswoman for the RAC Foundation, a commuter advocacy group. "This will be the last straw for some motorists."

Shell's Chief Financial Officer Peter Voser said oil companies are not to blame.

"We don't understand the oil price at this stage," he said. "The fundamentals will not justify an oil price as we see it at the moment."

Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.

Stripping out the impact of oil inventories that have risen in value, refining profits would have fallen 20 percent, Shell said.

"It seems that better marketing and trading were able to offset the weak refining environment," analyst Alexandre Weinberg of Petercam.

Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia's Sakhalin Island to a state-run enterprise.

BP's profit follows an even rougher period for the company from production outages, U.S. environmental fines and fraud and the scandal-tinged departure of its chief executive.

Chief Executive Tony Hayward, who took over from John Browne a year ago, has focused on bringing new production and refining capacity on line to improve earnings.

"At last, it appears that BP is beginning to improve its operational performance and this looks set to drive a stronger financial performance in the second half," said Tony Shephard, analyst at Charles Stanley & Co.

BP's closely watched replacement cost profit rose 48 percent to $6.59 billion (4.34 billion euros), compared with $4.44 billion in the first quarter of 2007. The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance because it excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices.

The company said refining availability improved for the sixth successive quarter.

"BP is still not firing on all cylinders but its operational turnaround looks to be on track with a strong second half recovery in prospect," said Charles Stanley & Co. analyst Tony Shephard.

___

AP Business Writer Toby Sterling in Amsterdam contributed to this report.

BP and Shell post big profits in era of record oil prices

BP and Shell post big profits in era of record oil prices

By JANE WARDELL, AP Business Writer
Tue Apr 29, 12:36 PM ET

BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted forecast-busting first-quarter earnings on Tuesday thanks to record crude oil prices that are expected to bolster profits across the industry.

The combined profits of $17 billion reignited calls for a windfall tax on oil profits as consumers struggle to pay for food and fuel.

British Prime Minister Gordon Brown suggested that some of those profits should be reinvested in costly exploration for new oil reserves in the North Sea.

BP posted a 63 percent surge in first-quarter net profit to $7.6 billion (4.9 billion euros), while Shell reported a 25 percent rise, to a record $9.08 billion (5.81 billion euros).

Revenue at BP jumped 44 percent to $89.2 billion (57.1 billion euros), while sales at Shell soared 55 percent to $114 billion (72.95 billion euros).

Last week ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. producer far outpaced industry expectations. More big profits are expected from the biggest two U.S. companies, Exxon Mobil Corp. and Chevron Corp., when they report first-quarter earnings later this week.

Crude oil hit $111.80 per barrel during the quarter, while gas jumped an average of 22 percent. Crude has pushed even higher since, reaching a record $119.93 per-barrel this week.

BP shares jumped 6 percent to 613 pence ($12.18), while Shell rose 4.5 percent to 25.83 euros ($40.39).

The enormous profit reports from European companies coincided with the end of a two-day refinery strike in Britain that shut off 700,000 barrels of oil per day, brought from the North Sea to a BP plant.

Truck drivers staged a protest in London's Park Lane on Tuesday, blaring their horns to protest a 30 percent rise in the price of diesel over the past year. A similar protest took place in Washington, D.C. on Monday, and it wasn't the first.

"The price of fuel is becoming something many families are struggling with," said Sheila Ranger, a spokeswoman for the RAC Foundation, a commuter advocacy group. "This will be the last straw for some motorists."

Shell's Chief Financial Officer Peter Voser said oil companies are not to blame.

"We don't understand the oil price at this stage," he said. "The fundamentals will not justify an oil price as we see it at the moment."

Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.

Stripping out the impact of oil inventories that have risen in value, refining profits would have fallen 20 percent, Shell said.

"It seems that better marketing and trading were able to offset the weak refining environment," analyst Alexandre Weinberg of Petercam.

Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia's Sakhalin Island to a state-run enterprise.

BP's profit follows an even rougher period for the company from production outages, U.S. environmental fines and fraud and the scandal-tinged departure of its chief executive.

Chief Executive Tony Hayward, who took over from John Browne a year ago, has focused on bringing new production and refining capacity on line to improve earnings.

"At last, it appears that BP is beginning to improve its operational performance and this looks set to drive a stronger financial performance in the second half," said Tony Shephard, analyst at Charles Stanley & Co.

BP's closely watched replacement cost profit rose 48 percent to $6.59 billion (4.34 billion euros), compared with $4.44 billion in the first quarter of 2007. The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance because it excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices.

The company said refining availability improved for the sixth successive quarter.

"BP is still not firing on all cylinders but its operational turnaround looks to be on track with a strong second half recovery in prospect," said Charles Stanley & Co. analyst Tony Shephard.

___

AP Business Writer Toby Sterling in Amsterdam contributed to this report.

Introducing Water Lamp

The video below shows a few Brazilians speaking Portuguese, so you English-speaking people reading this post may not understand the dialog. The video is still wortwatching, though. I plan on adding some subtitles eventually, but because I don't know when I'll get to that I thought I'd go ahead and post the video nonetheless.



The video starts with the reporter saying "every bottle filled with water helps save energy". The guy in the blue shirt came up with this idea of filling soda bottles and then placing them on the ceiling. This is a very poor neighborhood, so the reporter says the idea spread very quickly. Then you can see the lady showing her house. The reporter asks her if there's any disadvantage to have this "lamp". She thinks for a few seconds, then responds "there's no disadvantage". She says it works also when it rains, and that they don't have water leaking inside. At 2 minutes and 12 seconds of the video you can see the reporter inside another house. This time they are comparing how the much light they were getting with regular light bulbs before installing these "water lamps". That's why they have dark buckets covering two "water lamps". Then they turn off the light bulbs and it gets dark. Then they remove the buckets from the water lamps. Tye final comment is that they get more light from the "water lamps". The guy in the previous scene says "the light is always on" in that little factory they show.

Introducing Water Lamp

The video below shows a few Brazilians speaking Portuguese, so you English-speaking people reading this post may not understand the dialog. The video is still wortwatching, though. I plan on adding some subtitles eventually, but because I don't know when I'll get to that I thought I'd go ahead and post the video nonetheless.



The video starts with the reporter saying "every bottle filled with water helps save energy". The guy in the blue shirt came up with this idea of filling soda bottles and then placing them on the ceiling. This is a very poor neighborhood, so the reporter says the idea spread very quickly. Then you can see the lady showing her house. The reporter asks her if there's any disadvantage to have this "lamp". She thinks for a few seconds, then responds "there's no disadvantage". She says it works also when it rains, and that they don't have water leaking inside. At 2 minutes and 12 seconds of the video you can see the reporter inside another house. This time they are comparing how the much light they were getting with regular light bulbs before installing these "water lamps". That's why they have dark buckets covering two "water lamps". Then they turn off the light bulbs and it gets dark. Then they remove the buckets from the water lamps. Tye final comment is that they get more light from the "water lamps". The guy in the previous scene says "the light is always on" in that little factory they show.

James Kunstler visits Seattle.

Last Tuesday I had the incredible opportunity and honor to meet the great James Howard Kunstler in flesh and bones, right here in Seattle. James Kunstler came all the way from New York and was at the U. W. Bookstore signing copies of his latest book World Made By Hand.

For those who do not know James Kunstler, he is the author of the book The Long Emergency; a term which he coined. James Kunstler is also a speaker and outspoken leader. He first came into my world when I was checking out the TED site. One night I watched his video based on what he had to say about suburbia and American architecture, and I was very impressed with his talk. You can watch this video by going here.

James Kunstler also has written numerous essays that can be found on energybulletin.net. If his writing and content interest you, I invite you to check out what is there.

A few years ago I watched the documentary The End of Suburbia, not knowing that James Kunstler was in it! Well, he is and The End of Suburbia is a great documentary that is totally worth watching. James Kunstler also has a blog, which you can read here.

I asked James Kunstler if he had a message for Brazil when he signed my book, and he did! He wrote something that you can see here. Well, I’ll carry on that message. For the Brazilians that read this, the message in Portuguese is “Favor dizer ao Brasil para parar de destruir a floresta amazonica".

The Seattle Peak Oil Awareness group is grateful to James Kunstler for his magnificent work to save and protect our environment, and his efforts to reverse humans destructive actions towards the planet in an attempt that future generations perhaps are born into a world that is... habitable.

Ricardo Parker and the great James Kunstler

James Kunstler visits Seattle.

Last Tuesday I had the incredible opportunity and honor to meet the great James Howard Kunstler in flesh and bones, right here in Seattle. James Kunstler came all the way from New York and was at the U. W. Bookstore signing copies of his latest book World Made By Hand.

For those who do not know James Kunstler, he is the author of the book The Long Emergency; a term which he coined. James Kunstler is also a speaker and outspoken leader. He first came into my world when I was checking out the TED site. One night I watched his video based on what he had to say about suburbia and American architecture, and I was very impressed with his talk. You can watch this video by going here.

James Kunstler also has written numerous essays that can be found on energybulletin.net. If his writing and content interest you, I invite you to check out what is there.

A few years ago I watched the documentary The End of Suburbia, not knowing that James Kunstler was in it! Well, he is and The End of Suburbia is a great documentary that is totally worth watching. James Kunstler also has a blog, which you can read here.

I asked James Kunstler if he had a message for Brazil when he signed my book, and he did! He wrote something that you can see here. Well, I’ll carry on that message. For the Brazilians that read this, the message in Portuguese is “Favor dizer ao Brasil para parar de destruir a floresta amazonica".

The Seattle Peak Oil Awareness group is grateful to James Kunstler for his magnificent work to save and protect our environment, and his efforts to reverse humans destructive actions towards the planet in an attempt that future generations perhaps are born into a world that is... habitable.

Ricardo Parker and the great James Kunstler

Puget Sound Energy's Wind Power

I came across this great video today.
I am starting to love youtube!

Puget Sound Energy's Wind Power

I came across this great video today.
I am starting to love youtube!

China Celebrates Being Number 1 Polluter.

Adding a bit of humor to a serious topic:


China Celebrates Its Status As World2019s Number One Air Polluter

China Celebrates Being Number 1 Polluter.

Adding a bit of humor to a serious topic:


China Celebrates Its Status As World2019s Number One Air Polluter

What is Peak Oil???

These short videos explains Peak Oil to those who have landed here and are courageous enough to watch:




This one is just for "entertainment":

What is Peak Oil???

These short videos explains Peak Oil to those who have landed here and are courageous enough to watch:




This one is just for "entertainment":

Energy and Peak Oil

After much thought and consideration, I have decided to finally change the topic of this blog to “Energy and Peak Oil”.

Here’s the story that has led to this:
I started out as an electric car enthusiast, and came up with the idea of creating a web site for comparing electric cars, which cannot be compared side-by-side with gasoline cars due to their technical differences (range, battery type, maximum speed, etc).

Then I decided to start a blog, so I could write and record ideas that would not be forgotten as I developed this site. I did not think many people would be interested in my blog, but as I was writing mostly for myself and as a way to brainstorm and retain ideas, that was not an issue for me. When in doubt about an idea or topic, I always chose to write.

Well, my blog on Electric Vehicles has had great success, and I say this based on the number of readers it has achieved. I found out that a large number of people are now thinking about alternatives to gasoline (and that surprised me), and that is largely due to the recent increase in the cost of gasoline at the pump.

Another reflection of the surprising success my blog on EVs has had happened in the beginning of March 2008. The Seattle Post-Intelligencer said they liked my blog and wanted to feature it on their web site. This required me to commit to writing at least three times week, but this commitment occurred to me more like an incentive to write more often than a discouragement.

The new blog in the Seattle P-I drew a lot of readers immediately. It’s not surprising considering the great venue they are for readers, thinkers, and people interested in the latest news. I quickly got a lot of acknowledgment and have been contacted by a number of great people: readers and people in the EV community, and people in the Green industry as well.

In the meantime I wasn’t sure what to do with this blog being hosted on www.evdestination.com. I have become comfortable enough with the Seattle P-I blogging software (or blogware) to conclude I do not need two different blogs on electric cars. Also, in my continued research on electric cars and Peak Oil, I have come to the unfortunate conclusion that the world likely will not have much room for electric cars. Electric Vehicles will be a privilege of the few the way things are going. My suspicions have been confirmed and continue to be reassured: the energy crisis we are starting to face now that the cheap fossil-fuel era is over, is the biggest challenge humanity has ever faced. And interestingly enough, I love the topic of energy. I feel I have a lot to say about it. That is not to say I know a lot – I have much to learn, that’s for sure. But I feel that I have so much to offer in terms of solutions; it’s as if I have to do some brainstorming so I know what that is first, and then I can present it. I feel I was born to address the energy issue. I love educating myself on how societies extract and use energy, and I don’t mind thinking about it all the time. So this blog is now about Energy and Peak Oil. I think I have much to offer already, and rest assured I’ll continue to learn at a rapid pace as this is a topic I have great passion for, for a reason I cannot explain.

Electric cars are obviously directly linked to the issue of Peak Oil, and both blogs will be referring to each other when appropriate. One reason I have been promoting electric cars is because of their efficiency: they are about 90% efficient whereas with gasoline about 75% of its energy gets wasted by the Internal Combustion Engine. Another factor that greatly motivates me to promote electric cars (and to want one) is the fact they have no tailpipe emissions, meaning they do not have to use fossil-fuels for driving. If electricity from renewables is used to power these EVs, then the depletion of crude oil can be greatly extended. Ultimately there will be no oil left for us to use though, as oil is a finite resource. And until we find a viable replacement and an infrastructure that can be built and maintained without the use of fossil-fuels, I have to think there is no future for electric cars and that at best they will help us transition into the new future of scarce and expensive fossil-fuels.

I am an optimist, and I trust that human ingenuity will overcome this energy challenge so that we can maintain the great quality of life we have in the developed world, and avoid a huge population die-off. I follow the philosophy of Alchemists, who had the power to change lead into gold through the power of Mind. Yet I do believe we live on a planet where natural resources are finite. In combining these two approaches I hope to address this serious and depressing topic of Peak Oil in the most optimistic possible way. My goal is to promote discussions, to have people thinking and proposing solutions while making the necessary lifestyle adjustments at the same time (energy conservation being one).

I can’t emphasize how it is not joyful for me to embrace the belief that there will be no room for electric cars in the future. Electric Vehicles offer so much more power, performance, speed - all things that I love and are at the core of the American culture. But electric cars are complex machines that also require fossil-fuels in their manufacturing process. And all the evidence indicates that world manufacturing capacity has reached its peak, and it will decline alongside of the supply of energy.

“The world is not running out of oil – at least not yet. What our society does face, and soon, is the end of the abundant and cheap oil.” – Colin J. Cambell, founder of the Association for Study of Peak Oil and Gas (ASPO), 1998

"During times of universal deceit, telling the truth becomes a revolutionary act.” – George Orwell, author of Nineteen Eighty-Four

Energy and Peak Oil

After much thought and consideration, I have decided to finally change the topic of this blog to “Energy and Peak Oil”.

Here’s the story that has led to this:
I started out as an electric car enthusiast, and came up with the idea of creating a web site for comparing electric cars, which cannot be compared side-by-side with gasoline cars due to their technical differences (range, battery type, maximum speed, etc).

Then I decided to start a blog, so I could write and record ideas that would not be forgotten as I developed this site. I did not think many people would be interested in my blog, but as I was writing mostly for myself and as a way to brainstorm and retain ideas, that was not an issue for me. When in doubt about an idea or topic, I always chose to write.

Well, my blog on Electric Vehicles has had great success, and I say this based on the number of readers it has achieved. I found out that a large number of people are now thinking about alternatives to gasoline (and that surprised me), and that is largely due to the recent increase in the cost of gasoline at the pump.

Another reflection of the surprising success my blog on EVs has had happened in the beginning of March 2008. The Seattle Post-Intelligencer said they liked my blog and wanted to feature it on their web site. This required me to commit to writing at least three times week, but this commitment occurred to me more like an incentive to write more often than a discouragement.

The new blog in the Seattle P-I drew a lot of readers immediately. It’s not surprising considering the great venue they are for readers, thinkers, and people interested in the latest news. I quickly got a lot of acknowledgment and have been contacted by a number of great people: readers and people in the EV community, and people in the Green industry as well.

In the meantime I wasn’t sure what to do with this blog being hosted on www.evdestination.com. I have become comfortable enough with the Seattle P-I blogging software (or blogware) to conclude I do not need two different blogs on electric cars. Also, in my continued research on electric cars and Peak Oil, I have come to the unfortunate conclusion that the world likely will not have much room for electric cars. Electric Vehicles will be a privilege of the few the way things are going. My suspicions have been confirmed and continue to be reassured: the energy crisis we are starting to face now that the cheap fossil-fuel era is over, is the biggest challenge humanity has ever faced. And interestingly enough, I love the topic of energy. I feel I have a lot to say about it. That is not to say I know a lot – I have much to learn, that’s for sure. But I feel that I have so much to offer in terms of solutions; it’s as if I have to do some brainstorming so I know what that is first, and then I can present it. I feel I was born to address the energy issue. I love educating myself on how societies extract and use energy, and I don’t mind thinking about it all the time. So this blog is now about Energy and Peak Oil. I think I have much to offer already, and rest assured I’ll continue to learn at a rapid pace as this is a topic I have great passion for, for a reason I cannot explain.

Electric cars are obviously directly linked to the issue of Peak Oil, and both blogs will be referring to each other when appropriate. One reason I have been promoting electric cars is because of their efficiency: they are about 90% efficient whereas with gasoline about 75% of its energy gets wasted by the Internal Combustion Engine. Another factor that greatly motivates me to promote electric cars (and to want one) is the fact they have no tailpipe emissions, meaning they do not have to use fossil-fuels for driving. If electricity from renewables is used to power these EVs, then the depletion of crude oil can be greatly extended. Ultimately there will be no oil left for us to use though, as oil is a finite resource. And until we find a viable replacement and an infrastructure that can be built and maintained without the use of fossil-fuels, I have to think there is no future for electric cars and that at best they will help us transition into the new future of scarce and expensive fossil-fuels.

I am an optimist, and I trust that human ingenuity will overcome this energy challenge so that we can maintain the great quality of life we have in the developed world, and avoid a huge population die-off. I follow the philosophy of Alchemists, who had the power to change lead into gold through the power of Mind. Yet I do believe we live on a planet where natural resources are finite. In combining these two approaches I hope to address this serious and depressing topic of Peak Oil in the most optimistic possible way. My goal is to promote discussions, to have people thinking and proposing solutions while making the necessary lifestyle adjustments at the same time (energy conservation being one).

I can’t emphasize how it is not joyful for me to embrace the belief that there will be no room for electric cars in the future. Electric Vehicles offer so much more power, performance, speed - all things that I love and are at the core of the American culture. But electric cars are complex machines that also require fossil-fuels in their manufacturing process. And all the evidence indicates that world manufacturing capacity has reached its peak, and it will decline alongside of the supply of energy.

“The world is not running out of oil – at least not yet. What our society does face, and soon, is the end of the abundant and cheap oil.” – Colin J. Cambell, founder of the Association for Study of Peak Oil and Gas (ASPO), 1998

"During times of universal deceit, telling the truth becomes a revolutionary act.” – George Orwell, author of Nineteen Eighty-Four