RYDAF - Royal Dutch Shell plc
| Previous Close | 29.44 |
| Open | 28.75 |
| Bid | 0.00 x 0 |
| Ask | 0.00 x 0 |
| Day's Range | 28.69 - 29.20 |
| 52 Week Range | 27.25 - 33.50 |
| Volume | 3,158 |
| Avg. Volume | 106,187 |
| Market Cap | 223.787B |
| Beta (3Y Monthly) | 0.64 |
| PE Ratio (TTM) | 11.58 |
| EPS (TTM) | 2.48 |
| Earnings Date | N/A |
| Forward Dividend & Yield | 1.88 (6.43%) |
| Ex-Dividend Date | 2019-08-15 |
| 1y Target Est | N/A |
- Reuters
REFILE-EXCLUSIVE-Aramco makes relatively little from foreign refining-documents
Documents from Saudi Aramco show that the world's largest oil firm earns only a limited proportion of its profit from foreign refining ventures, an area in which the company plans huge investment. The news comes as Aramco, according to two sources familiar with the matter, has delayed the planned launch of its initial public offering in hopes that pending third-quarter results will bolster investor confidence. Saudi Refining Inc, through which Aramco operates the largest U.S. oil refinery, made $423 million last year, separate accounts showed.
- Oilprice.com
A Draconian Crackdown Looms Over Natural Gas
Natural Gas is coming up against increasingly strong resistance from environmental activists and the public in general, leading some to question whether it will face the same fate as coal
- Bloomberg
China Beats U.S. 8-1 When It Comes to Charging Electric Cars
(Bloomberg) -- There are almost as many places to charge your electric vehicle in Beijing as there are in the entire United States.China, the world’s biggest market for EVs, has about eight public chargers for each one in the U.S., according to the latest counts. That imbalance likely will become more pronounced as China champions the technology spurring automakers to pivot away from gas guzzlers and accelerates its rollout of electric pumps, enlisting energy giants Royal Dutch Shell Plc and BP Plc along the way.A new-energy vehicle development plan under consideration by Chinese officials and intended to shape the sector through 2035 will set new goals for boosting the number of public and private chargers, a person familiar with the proposal said in September. The nation is said to be weighing a target for 60% of all automobiles sold to run on electric motors by then.All told, China’s electric fleet may swell to 162 million vehicles by 2040, according to forecasts by BloombergNEF.“The availability of charging facilities has been rising pretty quickly,” said Jing Kai, deputy head of the Beijing unit at Qingdao TGOOD Electric Co., which has the country’s largest network of charging plugs. “The goal is to help EV users charge their cars wherever they go, making it as easy as buying a bottle of water.” China’s Ministry of Industry and Information Technology, which oversees policy making for the auto sector, didn’t respond to a faxed query.EVs are essential to President Xi Jinping’s blueprint for creating a manufacturing superpower by 2025. The nation is building at least 20 “EV towns” for carmakers and ancillary industries, and it spent more than $30 billion subsidizing EV sales. China accounts for more than half of global EV sales.U.S. automakers are moving at a slower pace, with Tesla Inc. generating most EV sales. The U.S. subsidizes some purchases, yet those benefits phase out, and BNEF forecasts sales will slump this year.China had 466,101 public charging points by the end of last month, according to the China Electric Vehicle Charging Infrastructure Promotion Alliance. That includes more than 54,000 in Beijing alone.By comparison, there were 60,652 electric nozzles in the U.S. as of June 25, according to BNEF. California has the most of any state with 19,000 — or about the same amount China adds in an average month.With global EV sales forecast to rise to 56 million units by 2040, compared with about 2 million last year, there’s a need to vastly increase the number of publicly accessible chargers — not just to serve the expanding fleet but also to convince wavering consumers they can switch to electric models without fear of being stuck on the highway with an empty battery.As the speed of charging pumps increases, motorists increasingly are likely to refuel at workplaces, shopping malls or on the highway.In the U.S., automakers such as Tesla and Volkswagen AG are leading the push to add more chargers, including high-speed units. The number of points could surpass 400,000 by 2025, according to a forecast by Wood Mackenzie Ltd.Globally, there could be as many as 20 million public charging points installed by 2030, the International Energy Agency forecasts.Yet even in China, a nation with more chargers than any other, drivers still get frustrated trying to find a spot to juice up.Tom He drives a 25-seater Nanjing Golden Dragon Bus Co. Skywell minivan to shuttle workers between home and workplaces in Beijing, and he can cover as many as 160 kilometers (99 miles) on a single charge.“It’s not that easy to find an EV charging place,” He said. “It drives people crazy when you can’t charge them.” Costs also are a consideration, and it’s not uncommon to see EV owners lining up to use charging stations at night when electricity prices are lower, TGOOD’s Jing said. The company operates more than 131,000 connectors that fit almost all EV models in China, according to data compiled by BNEF.“There’s still a long way to go and a lot of issues we need to crack,” Jing said.Billions of dollars in government funding previously directed at lowering vehicle sticker prices now is being channeled, in part, toward expanding the number of charging stations, industry minister Miao Wei said in March. Some local authorities are offering incentives to lower construction costs for developers and to cut charging fees for consumers.There’s a risk that China is rushing too fast to install chargers, especially since the overall car market recorded falling sales in 15 of the past 16 months. That’s contributing to fears the nation’s EV bubble is bursting.Still, BP and Shell, among the energy industry’s biggest investors in cleaner technologies, are making moves to join China’s expansion.London-based BP in August agreed to form a joint venture with ride-hailing company DiDi Chuxing Inc. The companies opened a pilot site in Guangzhou with 10 fast-charging units.Shell, which has acquired two companies in the charging sector in the past two years, installed its first EV pump at a regular gas station in Tianjin.China’s national rollout means some provinces have more chargers than European nations. The western province of Xinjiang has more public pumps than Turkey or Hungary, while Tibet has more than Belarus and Serbia, BNEF data shows.“It’s a challenging job to become competitive in the charging equipment business, but we kept investing heavily in leading technologies,” said Yu Dexiang, founder of TGOOD. “Companies that fail to do these things in the future will be gradually eliminated.” \--With assistance from David Stringer, Ying Tian, Hannah Dormido, Leonard Kehnscherper and Kevin Dharmawan.To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net, Young-Sam ChoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Exclusive: No choice but to invest in oil, Shell CEO says
Royal Dutch Shell still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said. Shell, which supplies around 3% of the world's energy, set out in 2017 a plan to halve the intensity of its greenhouse emissions by the middle of the century, based in large part on building one of the world's biggest power businesses. A defiant van Beurden rejected a rising chorus from climate activists and parts of the investor community to transform radically the 112-year-old Anglo-Dutch company's traditional business model.
- Reuters
Greenpeace activists climb Shell North Sea platform saying 'clean up your mess'
Greenpeace activists boarded two Royal Dutch Shell oil platforms in the British North Sea on Monday in protest against plans to leave parts of the giant structures in place after production shuts down. Shell confirmed that protesters boarded the Brent Alpha platform and the Brent Bravo concrete legs.
- Reuters
Shell, Mitsubishi, KKR on Eneco auction shortlist - sources
Royal Dutch Shell , Japan's Mitsubishi Corp and private equity firm KKR have made the final round in an auction for Dutch utility Eneco, three sources close to the matter said. Eneco, estimated by analysts to be worth about 3 billion euros, aims to wrap up the process by Christmas. Royal Dutch Shell has teamed with Dutch pension fund manager PGGM while KKR has teamed with Dutch lender Rabobank, the sources said.
- Reuters
Shell to offset carbon emissions for British fuel buyers
Royal Dutch Shell said on Thursday it would offset the carbon dioxide emissions of around 1.5 million road users in Britain starting later this month under a loyalty scheme. Shell, like other oil companies, has come under pressure from shareholders to show how it plans to reduce its carbon footprint and help cut greenhouse gas emissions, a major cause of global warming. Britons are increasingly concerned about their environmental impact, with thousands of students striking earlier this year and green group Extinction Rebellion carrying out civil disobedience to push for more ambition on climate change.
- Market Realist
Which Energy Stocks Should You Consider Pre-Q3?
Energy stocks are slumping due to falling equity markets and plunging oil prices. So far this month, the S&P; 500 Index has fallen 2.8%.
- Bloomberg
Oil Jumps as Rockets Rain on Turkey, Deepening Conflict Worries
(Bloomberg) -- Oil climbed after simmering tensions between Turkey and Syria erupted into a shooting war, heightening geopolitical concerns on the edge of one of the world’s most important crude-producing regions. Futures rose as much as 2% in New York, halting two sessions of losses. A 2.93 million-barrel increase in U.S. crude inventories that exceeded the forecasts of more than 70% of analysts in a Bloomberg survey wasn’t enough to defuse the bullish momentum.Turkey formally announced the commencement of military intervention in Syria on Wednesday, just days after U.S. President Donald Trump said he wouldn’t stand in the way. That was followed within hours by a report that rockets fired from Syria struck a Turkish town.Oil prices had been on a downward trend after spiking in mid-September in the wake of attacks on Saudi Arabia’s energy industry. Signals that China might accept a limited deal with the U.S., as well as signs of a weakening dollar, were supportive to prices.West Texas Intermediate for November delivery rose 97 cents to $53.60 a barrel at 11:39 a.m. on the New York Mercantile Exchange.Brent for December settlement gained 95 cents to $59.19 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.63 premium to WTI for the same month.The Energy Information Administration on Wednesday reported that U.S. inventories of gasoline and diesel last week declined more than analysts in a Bloomberg survey expected. Crude stockpiles at the key storage hub in Cushing, Oklahoma, rose by 941,000 barrels.Meanwhile, the long-running U.S.-China trade deadlock appeared to thaw after Beijing indicated it’s open to reaching a partial trade deal with the U.S. The dispute has weighed on energy markets for months because it undermines global economic growth that dictates fuel demand.Two days of U.S.-China talks start Thursday in Washington. While negotiators aren’t optimistic about securing a broad agreement that would end the trade war, China would accept a partial deal as long as the Trump administration doesn’t impose any more tariffs, according to an official who asked not to be named because the discussions are private.\--With assistance from Elizabeth Low and Alex Longley.To contact the reporters on this story: Joe Carroll in Houston at jcarroll8@bloomberg.net;Sheela Tobben in New York at vtobben@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Carroll, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Shell CEO Says Blaming Oil Suppliers Won’t Solve Climate Change
(Bloomberg) -- The world can’t solve the problem of climate change solely by blaming energy producers like Royal Dutch Shell Plc, said the company’s top executive.Speaking at an event in London that was disrupted by protesters accusing attendees of destroying the planet, Shell Chief Executive Officer Ben van Beurden said the oil industry has to take radical steps to reduce carbon emissions, but consumers must do the same.“It’s us as a society that needs to transform, not just the suppliers of energy,” van Beurden said in a Bloomberg TV interview on the sidelines of the Oil & Money conference on Wednesday. “If you want to decarbonize the energy system, it’s not about forcing people to take lower-carbon supply.”Oil majors are under increasing pressure from investors and the public to move more quickly away from planet-warming fossil fuels. Shell is investing in wind farms, electric car charging and hydrogen, while also continuing to pump billions into its traditional fossil fuels business.“We are not Big Oil, we are Big Energy,” van Beurden said. In a nod to climate change and the energy transition, the Oil & Money conference will next year change its name to the Energy Intelligence Forum.Squeezing major oil companies isn’t the answer to climate change, the pressure must be applied equally to consumers, van Beurden said.“Climate change is the biggest challenge facing the energy industry, but the energy industry is not the biggest challenge for a world trying to tackle climate change,” he said. “We do not pump oil and gas from the ground and then leave it sitting in storage facilities. People consume it. They drive. They cook. They run their businesses.”While van Beurden and his peers sought to highlight their investments in sustainable energy and carbon reduction, none of them have embraced the more radical steps sought by Extinction Rebellion, which made repeated incursions into the London event to noisily demand the elimination of all greenhouse gas emissions by 2025.“You can see the acceleration of how society is mobilized, which I think is a good thing,” van Beurden said. But the world needs “a more mature debate where suppliers and users of energy join to figure out how to do things.”To contact the reporters on this story: Kelly Gilblom in London at kgilblom@bloomberg.net;Annmarie Hordern in London at ahordern1@bloomberg.netTo contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Rakteem KatakeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Shell urges collaboration with other industries to tackle emissions
Royal Dutch Shell's chief executive took aim beyond the energy sector to call on leaders of other industries including aviation, shipping and steel to jointly draw up plans to tackle greenhouse gas emissions. Ben van Beurden also warned on Wednesday that energy companies that do not collaborate in the fight against climate change under the 2015 Paris agreement risk going out of business. "Climate change is the biggest challenge facing the energy industry, but the energy industry isn't the biggest challenge for the world trying to tackle climate change," van Beurden told the Oil & Money conference.
- Bloomberg
Qatar Seeks Exxon, Shell, Other ‘Big Players’ for Gas Expansion
(Bloomberg) -- Qatar has invited Exxon Mobil Corp., Royal Dutch Shell Plc, Total SA, ConocoPhillips and other “big players” to submit bids to help expand its part of the world’s largest natural gas field, Energy Minister Saad Sherida Al-Kaabi said.The Persian Gulf state will award final contracts for onshore work on the North Field by the end of the year, he said Tuesday in a Bloomberg TV interview in London.Qatar, the biggest exporter of liquefied natural gas, is expanding the North Field in its drive to boost gas output to 110 million tons per year by 2024 from about 77 million currently. Australia will likely overtake Qatar as an LNG exporter in 2020, according to an Australian government report.“In the first quarter, we would have secured all the contracts for construction to start production in 2024,” said Al-Kaabi, who also serves as president and chief executive officer of state-run Qatar Petroleum. “We have a select few that we have invited to give us bids.”To contact the reporters on this story: Bruce Stanley in Dubai at bstanley5@bloomberg.net;Annmarie Hordern in London at ahordern1@bloomberg.netTo contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, Bruce Stanley, Rakteem KatakeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Market Realist
ExxonMobil Stock: Berenberg Cut Target Price before Q3
Berenberg cut its target price on ExxonMobil (XOM) stock from $73 to $63, according to Reuters. Analysts’ mean target price on ExxonMobil stock is $80.
- Oilprice.com
Is Bill Gates Right On Energy Investing?
Bill Gates’ advice to investors that are looking to invest in climate change projects was valid, but not everyone can afford to invest in ‘disruptive technologies’
Oilprice.comThe Oil Majors Leading The M&A Boom In Oil And Gas
European supermajors BP and Shell occupy the top spots on opposite sides of Rystad Energy’s M&A ranking for the oil and gas sector during the last five-year period
- Reuters
UK National Theatre to end Shell link in "climate emergency"
Britain's National Theatre has decided to end its partnership with energy group Royal Dutch Shell as part of a broader "climate emergency" initiative to reduce its carbon impact. The move came in the week that the Royal Shakespeare Company said it would drop BP Plc as its sponsor after young people told the theatre group its association with the energy company turned them off going to its plays. "The National Theatre has declared a climate emergency today ... Shell have been valued and longstanding supporters of the National Theatre ... This membership will come to an end in June 2020," a National Theatre spokeswoman said.
- Bloomberg
Aramco’s Cash Flow Gets the Royal Treatment
(Bloomberg Opinion) -- Saudi Aramco has worked hard these past few weeks on displaying resiliency. This week, its owner chipped in to help.While Saudi Arabian Oil Co., to give its full name, focuses on repairing damage from last month’s attacks, the government wants to shore up the pitch for the forthcoming biggest IPO ever. The latest tool is a presentation posted to Aramco’s website. Like the recent earnings call, it is brief. But tucked in toward the back was an eye-catching number: $75 billion. That is the company’s guidance for a “base dividend” in 2020; a figure 50% higher than the combined dividends of BP Plc, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA in the year through June.When you’re IPO-ing Bigger Oil, getting a commensurate valuation means promising giant payouts. Aramco seems able to afford it, with free cash flow of $88 billion in the 12 months through June. That said, this is a cyclical business replete with risks; and, as we have just been reminded, Aramco isn’t based in Switzerland.So there’s another sweetener in that presentation – and one which doesn’t cost Riyadh anything.I’ve updated my Aramco valuation from last year using the various bits of pre-IPO marketing, including April’s hefty bond prospectus. The main assumptions are 11 million barrels a day of crude oil production, Brent flat at $65 a barrel, net refining margins of $3 a barrel and chemicals net margins of $100 a tonne. (There are many others, so please see the footnote if you care.(1)) These spit out free cash flow of almost $87 billion. Put that on a prospective yield of 5.85% (the yield on Aramco’s 30-year bonds plus a 2% risk premium), and the implied valuation is $1.48 trillion – humongous, though still short of Riyadh’s $2 trillion dream.Saudi Arabia may yet engineer an initial valuation with a two in front of it anyway, with reports of local billionaires being pitched on the idea of chipping in for a domestic listing and fulfilling their patriotic duty. Done artfully enough, this could secure any headline valuation desired, albeit in a way similar to how, way back when, your dad might have paid you $5 for a cup of that homestyle lemonade you pretended to make.A more fundamental support is that other item in the presentation: a change to Aramco’s royalty rates. These are the cut of revenue from oil and gas production the government takes off the top, operating on a sliding scale determined by oil prices. Under the old system, Aramco paid 20% when Brent crude oil was $70 or less, 40% on the next $30, and then 50% on anything over $100 a barrel. From January 1, 2020, those rates will shift to 15%, 45%, and 80%(2).That cut of five points on the lowest tier is especially important, because that is where oil appears to be anchored for now. The biggest surprise arising from the recent attacks on Aramco’s infrastructure is how quickly the market shrugged it off and slipped back into its despair at the direction of the global economy. In taking royalties down at the lower tier but jacking them up for triple-digit oil prices – to the point where virtually none of that excess hits the bottom line – Aramco is signaling it’s built to be resilient, and generous, at lower oil prices, rather than necessarily representing a bet on another supercycle.On my calculations, using $65 Brent, the new royalty rates add almost $8.5 billion to Aramco’s free cash flow. That’s worth a whopping $145 billion in valuation using the same discount rate. What’s more, given the government reaps money not just at the royalty line, but also in income tax and dividends, the change doesn’t cost it a thing.This is especially important if Aramco really means to debut at a time of heightened tension in its neighborhood and gathering clouds on the economic front. Unlike the scenario above, Aramco’s crude oil production has averaged only 9.8 million barrels a day this year; and it may have to stay restrained given the weakness in oil prices, with the consensus forecast for Brent in 2020 standing at just $60 a barrel. And Aramco is buying a 70% stake in Saudi Basic Industries Corp., or SABIC, at a cyclical low point, with analysts expecting free cash flow for that company of just $4.7 billion next year.Plug those assumptions into my Excel contraption, and out pops a free cash flow figure of $65 billion – $10 billion less than that dividend guidance. My model could be off, of course, and 2020 could turn out better; add $5 to oil and 500,000 barrels a day to production and, voila, free cash flow jumps to more than $77 billion. Plus, that dividend is discretionary; and, like one of its peers, Aramco could borrow to cover some of it in a pinch, especially given its low leverage today.Even so, that change to the royalty regime suggests its current royal shareholder isn’t taking any chances.(1) Other key assumptions include the following. Upstream production costs (including SG&A, exploration and R&D) of $3.50 per barrel of oil equivalent (BOE). Depreciation of $2.50 per BOE. Corporate tax rate of 50% and interest rate on debt of 3.85%. Capex of $35 billion. Dividend from Saudi Basic Industries Corp. equivalent to 70% of estimated mid-cycle free cash flow of $7.5 billion. Natural gas and ethane production of 9and 1 billion cubic feet priced at $8.50 and $10 per BOE, respectively. Natural gas liquids production of 1.3 million barrels a day, priced at 50% of Brent crude. Refining utilization of 95% on projected net capacity of 3.9 million barrels a day. Chemicals utilization of 90% on projected net capacity of 20.8 million tonnes per year.(2) Aramco also pays royalties on its natural gas liquidsbut these are negligible.To contact the author of this story: Liam Denning at ldenning1@bloomberg.netTo contact the editor responsible for this story: Mark Gongloff at mgongloff1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Reuters
Shell approves upgrade Britain's North Sea Pierce field to produce gas
Royal Dutch Shell and Ithaca Energy have given the go-ahead for upgrading the Pierce oilfield in the British North Sea so that it can produce natural gas, Shell said on Thursday. The project involves modifying the existing floating production, support and offloading (FPSO) vessel and installing a sub-sea gas export line from the FPSO to the SEGAL pipeline. "This important development of the Pierce field will allow us to unlock additional gas reserves for the UK," said Steve Phimister, head of Shell's North Sea.
- Bloomberg
Shell Takes 20% Stake in Indian Solar Firm Orb Energy
(Bloomberg) -- A Royal Dutch Shell Plc division took a 20% stake in Indian solar firm Orb Energy Pvt Ltd. as part of a drive to deliver a reliable source of electricity to 100 million people in the developing world by 2030.Orb Energy, based in Bengaluru, south India, provides credit to small and medium sized firms to invest in solar panel systems. Founded in 2006, Orb Energy has sold over 160,000 solar systems in India with a total capacity of 75 megawatts.“This is a vital and growing sector, with great potential to contribute to the country’s renewable energy ambitions,” Brian Davis, vice president in the Shell Energy Solutions division said in a statement.The deal is the latest of several Shell has made in India, aimed at reducing energy poverty through investment in Africa and Asia. In 2018, the oil major invested in an Indian company that builds and installs miniature power grids.To contact the reporter on this story: Jeremy Hodges in London at jhodges17@bloomberg.netTo contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Helen Robertson, Rakteem KatakeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Market Realist
XOM, CVX, RDS, BP: Will Energy Earnings Fall in Q3?
Integrated energy stocks slumped in the third quarter. Lower oil prices, equity market volatility, and macro concerns hammered the stocks.
- Oilprice.com
False Optimism In Oil Won’t Last
News that U.S. production fell in July has counteracted trade war fears, but it is highly likely that July’s dip in production was due to hurricane outages
- Market Realist
A Q3 Wrap-Up for Energy Stocks: BP, XOM, CVX, RDS.A
Integrated energy stocks slumped in the third quarter. Royal Dutch Shell (RDS.A) stock fell the most, dropping 9.6% in the third quarter.
- Bloomberg
Saudi Aramco to Boost Dividend, Seeks Asian Investors for IPO
(Bloomberg) -- Saudi Aramco sought to underpin the targeted $2 trillion valuation for its initial public offering by increasing dividends, paying less tax and finding cornerstone investments from major Asian oil producers.The moves, which came as the state-run company said it had restored all output halted by attacks on its main crude-processing facility last month, show preparations are accelerating for the listing, with the aim of offering shares on the Saudi bourse as soon as November.The IPO is the centerpiece of Crown Prince Mohammed Bin Salman’s plans to revamp the Saudi economy and release billions in capital for the kingdom’s sovereign wealth fund. The efforts to make Aramco a more appealing investment and guarantee demand for shares come amid skepticism that the prince’s valuation is attainable.Should the kingdom meet that target, the proposed payout of $75 billion next year would still leave dividend yields below those already offered by competitors like Exxon Mobil Corp. and Royal Dutch Shell Plc. While Aramco is the world’s most profitable company and produces about 10% of the world’s oil, it also carries greater risks, as illustrated by the drone and missile strike on key facilities in September.Growing DividendsThe 2020 payment is part of plan for a growing, progressive dividend to investors, according to a corporate presentation posted on the company’s website on Monday.Dividends of $75 billion would give investors a yield of 3.75% if the company achieves its $2 trillion valuation. Although a decent payout in a low-interest rate world, it’s a lower dividend than other Big Oil firms: investors in Shell receive 6.22%, while Exxon pays out 4.9%, according to data compiled by Bloomberg.Equity investors will also receive only slightly higher returns than bond investors -- the yield on the company’s 2029 bond is about 3%.Aramco could boost the dividend still further with one-time rewards to shareholders. It paid out a $20 billion special dividend in the first half of the year on the back of an “exceptionally strong financial performance” in 2018, the company said in August, though that payment caused its cash pile to drop markedly.In a bid to reassure potential investors, the company also said that if the total dividend falls below $75 billion between 2020 and 2024 it will prioritize payouts to non-government shareholders.Cornerstone InvestorsAramco has approached Asian state oil producers including Malaysia’s Petroliam Nasional Bhd., Sinopec Group and China National Petroleum Corp. about potential cornerstone investments in the IPO, people with knowledge of the matter said. The Gulf energy giant and its advisers have also reached out to China’s sovereign wealth fund and state-owned entities from the United Arab Emirates and Kuwait, including Abu Dhabi sovereign fund Mubadala Investment Co., as well as Canadian pension funds, the people said, asking not to be identified because the talks are private.To read more about Aramco’s existing ties with major Asian producers, click here.Deliberations are at a preliminary stage, and Aramco hasn’t yet received any firm commitments, the people said. Aramco’s advisers are arranging meetings with some potential investors this week and next week, according to the people. The funds could decide against buying into the offering, they said.Aramco is leaning on business partners and friendly governments to help achieve its preferred valuation even after oil prices fell more than 25% over the past year. It’s casting a wide net to attract enough demand as it accelerates preparations for the listing in Riyadh. An original plan to list the company on an international exchange at the same time was dropped last year after international investors balked at the valuation.Tax ChangesThe third plank of Aramco’s pitch to investors was a changed schedule for royalty tax on oil production. Payments will be lower when oil is below $70 a barrel, but higher above that level.Under a new royalty structure effective from January, Aramco will pay 15% for Brent prices up to $70 a barrel, 45% for Brent prices between $70 a barrel and $100 a barrel, and 80% on Brent prices above $100 a barrel. The current tax regime, introduced in January 2017, started at 20% and peaked at 50%.The new royalty structure will be a significant boost at today’s oil prices -- it’s equivalent to about $3 a barrel on each of the 9.9 million barrels the company produces daily.To contact Bloomberg News staff for this story: Matthew Martin in Dubai at mmartin128@bloomberg.net;Anthony DiPaola in Dubai at adipaola@bloomberg.net;Elffie Chew in Kuala Lumpur at echew16@bloomberg.net;Vinicy Chan in New York at vchan91@bloomberg.net;Steven Yang in Beijing at kyang74@bloomberg.net;Matthew Monks in New York at mmonks1@bloomberg.net;Jasmine Ng in Singapore at jng299@bloomberg.netTo contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net, James Herron, Christopher SellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Oilprice.com
Big Oil Fights For Its Life
Oil majors are looking for growth beyond fossil fuels, and while they struggle to convince shareholders of their new strategies, they must continue to yield a profit
- Reuters
Nigeria's Rivers state says it bought Shell stake in Ogoniland oilfield
The governor of Nigeria's Rivers state said on Monday it had purchased Royal Dutch Shell's stake in a contested oil mining licence in the Ogoniland region, the centre of protests in the 1990s over the distribution of oil wealth. Governor Nyesom Wike told a news conference that Rivers had "fully acquired" the stake in OML 11 from Shell. Shell, whose Nigerian subsidiary Shell Petroleum Development Company (SPDC) jointly owns the licence with the Nigerian National Petroleum Company, declined to confirm or deny the sale.
