Bidness ETC - Exxon Mobil Ramps Up Production At New Indonesian Oil Field Despite Of Oversupplied Market

The output from the Banyu Urip field, part of ExxonMobil's Cepu block in East Java, is crucial to Indonesia's long-term efforts to meet rising domestic demand.

Exxon-Mobil (NYSE:XOM) has ramped up its production at a new Indonesian oil field, with a target to boost its output later this year by more than 200,000 barrels per day, just when the market is already oversupplied, despite the rise in oil prices for the past few weeks.

The output will originate from the Banyu Urip field, which is part of Exxon’s Cebu block in East Java. The move is seen as a long-term plan to tap into the country’s rising domestic demand, especially as other fields begin to age in the Southeast Asian country.

This is in contrast to ConocoPhillips’s, which has just laid off 300 out of 1200 Indonesians from the workforce, citing low oil prices and cost cutting measures. If Exxon is taking a long-term approach by looking at the future energy demand of the country and investing accordingly, which will probably result in a more oversupplied oil market, then why cannot ConocoPhillips?

Currently, the oilfield is producing over 75000 bpd during the end of last month. The oil field was discovered in 2001, and since its 15 years in operation, it has been going strong, though there has been lingering disagreements between the oil major and state company Pertamina, which consequently slowed the process of development.

Indonesia plans to boost its oil output from the current 800,000 bbl/day to around 830,000 bbl/day. Country has been struggling to boost its oil output ever since it has left OPEC, due to investors’ worries over corruption and bureaucracy. Traders say that they expect the first shipment of crude oil from the new oil field to commence around the third quarter, which is going to hurt the oil market even more with oil prices still tumbling downwards despite the rise in price for the past few weeks.

In separate news, Exxon Mobil has announced that the company has begun its bitumen production operation at the Cold Lake Nubile project in northeastern Alberta, Canada. Currently it is producing around 20,000 barrels per day, which is likely to increase up to 40000 barrels per day once the project operates in full stream. The project was planned and executed on behalf of ‘Imperial Oil Limited’, when it was first sanctioned in 2012.

The company is now looking forward to the output from Banyu Urip field, which is crucial to Indonesia's long-term efforts to meet rising domestic demand.

Exxon Mobil’s stock price ended the day at $87.49, a gain of 0.60% from the previous day.

Bidness Etc - Exxon Mobil Trims Capital Expenditure By $4.64 Billion For FY15

Exxon's stocks were trading 1% down during trading hours today.

Exxon Mobil Corporation (NYSE: XOM) reported Wednesday that it will trim its capital expenditure by $4.64 billion for the fiscal year 2015 (FY15), joining other oil giants which are also considering slashing their spending for the current year.

However, the company intends to stick with its initial product target, which was made when crude was worth more than $100 per barrel, believing that the demand for crude will continue to rise throughout the year.

The oil giant said it will cut its capital spending 12% to $34 billion for FY15, compared to earlier estimates of $38.5 billion.

Exxon's stocks were trading 1% down during trading hours today.

WSJ reported that more than two dozens of independent oil producers have decided to slash its capital expenditure for the current fiscal year by almost $24 million, down from last year’s spending. BP Plc trimmed its spending for FY15 by 13% YoY in February.

Although, Exxon CEO Rex Tiller said that the company will not change its long-term approach to capital allocation, average capital expenditures are likely to be less than $34 billion for FY16 and FY17.

Following years of high spending on massive projects worldwide, Exxon has decided to reduce its capital spending. When crude was trading more than $100 per barrel, oil companies were striving to drill more rigs and enhance their profitability, which resulted in huge development expenses.

In past few months, oil has rallied mostly due to slashing of capital expenditure by oil producing companies, which could aid to bring the oil prices back to its initial level. In mid-February, Brent surpassed $60 for the first time in 2015

The Texas-based oil company said that commodity prices had driven its business strategy, as it plans to raise production level by 2% YoY for FY15. It will further upgrade its new project in Indonesia, Canada, and Angola in FY15. For FY 16 and FY17, it had planned to upsurge development of projects in United Arab Emirates, Russia, and Australia.

Recently in April, the company has been down on its ratings though as the company has lodged a case at the Stockholm arbitrage court against Russia due to the reason of tax dispute because of the excess of its ongoing project in Russia. as notified by the spokeswoman for Russia’s Energy Ministry. The details of this project however weren't disclosed to the media thought through press release. The company itself believes that they have overpaid profit taxes on its oil and gas project Sakhalin-1,. In this the company itself owns a stake of 30% and is seeking reimbursement of their part in this project.

Bidness Etc - Halliburton Plans to Cut off Jobs As Oil Price Decreases

Halliburton Company plans to cut off 8% of its workforce as oil prices all over the world faced a decline. The company has been facing a tough time lately, with oil prices all over the world fluctuating and eventually falling.
The oil service provider has decided to cut off thousands of jobs from its workforce globally. As of California, the company’s workforce is small and has only 600 employees in total and it’s not confirmed whether the company will fire employees from its main headquarter in USA or not.
Officials said that the company will cut off around 5,200 to 6,400 jobs in the upcoming layoff that the company feels it should implement.
According to a company’s spokesperson, Halliburton (NYSE:HAL) values each of its employees but the prevailing oil prices in the market have forced the company to take decisions that are for the company’s welfare.
Halliburton’s officials said that the company is still observing the difficult situation that the company is in and will make further decisions accordingly. The oil prices in the global market have fallen by around 60% which is a huge disappointment to all the companies working in the oil space.
Last month, Sclumberger Company, that is an oil services provider as well, announced that it would be Cutting off 9,000 jobs due to the collapse in sales. Baker Hughes, a company that opposes Halliburton in the oil field business, also declared termination of 7,000 employees in totality. Weatherford is another oil field services provider that disclosed its plans of annulment of 8000 jobs in the company.
According to a study, the oil industry has lost a total number of 21,000 jobs in the month of January, all because of the recession in the oil prices. In a recent press release, Halliburton also confirmed that this layoff of jobs was not due to the company’s plans of getting its hands on its rival Baker Hughes.
According to a firm named Challenger, oil companies have cut off 22,000 jobs since the summer of 2014, when the oil prices began to drop for the first time.
Halliburton Company is an oil field services provider that works globally, with its headquarters in Texas, USA and Dubai, UAE. It is the world’s second biggest oil services company that is currently active in over 80 countries all over the world. It has subsidiaries and branches and brands globally and has around 100,000 employees.

Bidness Etc - Factors affecting Tesla motors (NASDAQ:TSLA)

During the last several months oil prices have had a great fall, which had a negative impact on the automaker’s capitals. According to a report by Morgan Stanley, there are few regions in which Tesla Motors could confront issues which would eventually allow them to redeem their stance.
Sales of luxury Model S sedan are not likely to suffer due to this issue, however, upcoming Model 3, which has a lower value point, might become the victim of this tyranny.
Another issue Tesla Inc. can face is US dollar volatility, Jonas said. As US dollar strengthens it will affect Tesla because of its exposure to international market. Tesla’s production cost will go up as its production is entirely based in the United States. However, its sales will go down as more than 50% of the automaker's business is situated outside United States.
According to Adam Jonas analyst at Morgan Stanley, if the dollar strengthens by 10% against euro, there would be a adverse impact up to $100 million on Tesla Motors. Since 30% of its volume will arrive from Western side of Europe this year. Thus, Tesla Motors cut $70 million from their working figure during the current year and $20 million from the final quarter.
Jonas has said; “continuous volatility will complement, but for investors who believe in the company, Tesla stock is a worthy choice”.
On Thursday, a better buying opportunity was shown by Tesla Motors.US dollar affecting the stock price of Tesla Motors and the main reasons behind that are decreasing oil prices, sluggish sales in china and stronger, Morgan Stanley brings down its price target on Tesla Motors from stock price of $290 to $280 per share.
Jonas also reported that he had reduced his fourth quarter prediction to 9,993 from 11,165 units. As a result of the whole estimation, it comes to 31,814 units which means more than 1000 units are are there. And just because of lower volume estimate and strengthening of the US dollar, Jonas lowered his estimation regarding gross margin from 29.6% to 28%.
Last week at Detroit Auto show Tesla Motors CEO Elon Musk said, they assume GAAP to be profitable by 2020 in the U.S, however, according to Jonas forecast by the end of 2020, Tesla will earn approximately $1.6 billion in U.S GAAP profit.
The analyst noted that there’s been a shift in emotion are positive on Tesla Motors because of believe that the automaker’s technology will make traditional car engines “outdated” in coming years.