2024-07-12 11:33

BRUSSELS, July 12 (Reuters) - The European Union may make it easier for governments to slash energy tax rates if prices jump unexpectedly, under draft proposals countries are discussing to overhaul the taxes in the bloc. The European Commission proposed a revamp of EU energy tax rules in 2021 to make them more climate-friendly, including by introducing taxes on polluting aviation fuels, which currently escape EU-wide levies. EU countries have struggled for years to agree on the proposal. Belgium, which led negotiations in the first half of this year, eventually halted talks because of the splits between countries over issues including whether to tax shipping and jet fuels. Hungary, which this month took over the EU's rotating presidency, has revived the policy and proposed a compromise, a document seen by Reuters showed. One of the proposed compromises would allow governments to cut energy taxes to below EU-minimum rates, if the price of electricity or an energy product rises by more than 40% over three months, the document showed. This would make it easier for governments to quickly cut taxes, to curb consumers' bills, in response to an energy crisis like the one Europe faced in 2022, when gas prices soared to record highs after Russia cut deliveries to Europe. "The effect of a price increase higher than 40% has such a significant impact on the economy and households, that needs to be addressed by the member states," the draft compromise said. Previously, the EU tax proposal would have only allowed such tax cuts if energy prices soared by 70% over six months. But in an acknowledgement of the remaining splits, Hungary's proposal did not touch the sensitive issue of shipping and aviation fuel taxes, which the document said need to be addressed later at a "higher political level". Some EU diplomats were sceptical an agreement on the policy could be reached. Previous rounds of negotiations have failed to win governments' backing, despite offering exemptions to island countries concerned about how aviation fuel taxes would affect their economies. Changing EU tax policy is difficult because it requires unanimous approval from all EU countries - meaning any one government can block it. Diplomats from EU countries will discuss the compromise on Friday. Sign up here. https://www.reuters.com/business/energy/eu-considers-allowing-faster-energy-tax-cuts-if-prices-jump-draft-shows-2024-07-12/

2024-07-12 11:29

LONDON, July 12 (Reuters) - Shell (SHEL.L) New Tab, opens new tab has replaced liquefied natural gas (LNG) volume it lost after exiting Russia in 2022 with a string of deals that underpin CEO Wael Sawan's bet on growing demand for the fuel as he reduces the focus on renewable energy. The new projects in the United Arab Emirates and Trinidad and Tobago and the acquisition of a large trading portfolio put Shell half way to achieving its target to increase LNG volumes by up to 20 million metric tons per year (mtpa) between 2023 and 2030, according to analysts and Reuters calculations. They also allow the British company to recover supplies lost when it pulled out of Russia after Moscow's invasion of Ukraine in 2022. The move led to a loss of 2.5 mtpa of supplies from the giant Sakhalin LNG project and a 5% drop in Shell's liquefaction volumes in 2023 compared with the previous year. LNG became Shell's flagship division following the $53 billion acquisition of BG Group in 2016. Its integrated gas division delivered nearly half of Shell's $28 billion adjusted earnings in 2023, helped by very strong results from its trading business, the world's biggest LNG trader. Since taking office in January 2023, Sawan has sought to boost Shell's performance, pulling out of many wind, solar and low-carbon ventures while doubling down on natural gas. Shell forecasts the LNG market will grow by around 50% by 2040 from around 400 mtpa in 2023 as Asian economies grow and as gas, the least polluting fossil fuel, replaces coal in power generation. The British company aims to grow its LNG sales volumes by 20% to 30% by the end of the decade to up to 87 mtpa from 67 mtpa in 2023. On Wednesday, Shell announced it had invested in a 10% stake in Abu Dhabi National Oil Company's Ruwais LNG project that will more than double the plant's output to 15 million tons per year (mtpa) by 2028. It will also buy 1 million mtpa from the plant, which is expected to cost around $5.5 billion, according to Japan's Mitsui (8031.T) New Tab, opens new tab, another partner. Shell also shouldered 10% of the engineering and planning costs that preceded Adnoc's final investment decision in the Ruwais facility last month, industry sources told Reuters. Shell declined to comment. On Tuesday, Shell said it would go ahead with the development of its 2.7 trillion cubic feet (tcf) Manatee natural gas field offshore Trinidad, which will feed the country's under-utilised 15 mtpa Atlantic liquefaction facility. And last month Shell agreed to buy Singaporean LNG company Pavilion Energy from global investment company Temasek which gives it access to new gas markets in Europe and Singapore as well as 6.5 mtpa of supply contracts across the world. HALF WAY The three deals will get Shell half way to the growth target, said Saul Kavonic, head of energy research at MST Financial. "These three deals, in addition to LNG projects already underway, should see Shell achieve its 2030 LNG sales growth target, provided they can also offset decline elsewhere in the portfolio," Kavonic said. Zoë Yujnovich, Shell's Integrated Gas and Upstream Director, told Reuters in late May that around half of the 2030 growth, roughly 11 mtpa, will come from projects under construction such as Qatar's vast expansion of its North Field complex, its LNG Canada project that is expected to go online next year and Nigeria's NLNG facilities. Shell will also boost operating LNG plants such as its Prelude floating LNG facility off Australia's western coast and the Atlantic facility in Trinidad and Tobago. Shell aims to maintain a 50-50 ratio between its own LNG production and volumes it acquires from other producers, she added. The recent investments align with Shell's strategy which sees LNG as a "critical fuel in the energy transition", Accela Research analyst Rohan Bowater said. "Shell frames LNG as a decarbonisation lever, but it has limited impact" on its target to reduce the carbon intensity of its portfolio by 15% to 20% by 2030, Bowater said. Increasing the weighting of gas in Shell's portfolio by 10% by 2030 will result in a 4% reduction in net carbon intensity. The same increase in renewables capacity would achieve a reduction of 14%, he said. Sign up here. https://www.reuters.com/business/energy/shells-bet-gas-boom-takes-shape-with-string-deals-2024-07-12/

2024-07-12 11:15

BRUSSELS, July 12 (Reuters) - U.S. grains merchant Bunge (BG.N) New Tab, opens new tab and Glencore-backed (GLEN.L) New Tab, opens new tab Viterra have offered concessions aimed at winning EU antitrust approval for their $34 billion merger, the European Commission website showed on Friday. The companies announced their merger a year ago in a challenge to global giants Archer-Daniels-Midland (ADM.N) New Tab, opens new tab and Cargill (CARG.UL). The European Commission, which did not provide details of the concessions in line with its policy, extended its deadline for a decision to Aug. 1 from July 18. A spokesperson for Bunge said the company was in constructive discussions with the European Commission, and confirmed it offered concessions without specifying what they were. "We are confident that the commitments we have offered address the areas of concern expressed by the Commission, which are limited to specific markets," the spokesperson said. The European Commission is expected to seek feedback from rivals and customers before deciding whether to accept the concessions or demand more. It can open a four-month investigation if it has serious concerns. The deal has triggered concerns from the Canadian competition watchdog and farm groups. It requires regulatory clearance in North America, South America and China. Sign up here. https://www.reuters.com/markets/deals/bunge-viterra-offer-concessions-they-seek-eu-okay-34-bln-deal-2024-07-12/

2024-07-12 11:03

July 12 (Reuters) - Top U.S. independent oil producer ConocoPhillips (COP.N) New Tab, opens new tab said on Friday it received a second request from the U.S. Federal Trade Commission for information on its proposed acquisition of rival Marathon Oil (MRO.N) New Tab, opens new tab. ConocoPhillips said both companies received the requests on July 11 and are working with the FTC to review the merger. CONTEXT Conoco said in May it would pay $22.5 billion in stock for Marathon Oil to boost its output and achieve greater economies of scale in U.S. shale fields and in liquefied natural gas. Its deal followed Exxon Mobil's (XOM.N) New Tab, opens new tab $60 billion acquisition of Pioneer Natural Resources, Chevron's (CVX.N) New Tab, opens new tab proposed $53 billion merger with Hess, Chesapeake Energy's (CHK.O) New Tab, opens new tab $7.4 billion purchase of Southwestern Energy and Occidental Petroleum's (OXY.N) New Tab, opens new tab $12 billion bid for CrownRock. WHY IT'S IMPORTANT The request for additional information is likely to slow the closing of the deal. ConocoPhillips had said in May a "conservative" estimate of when the deal will close is the fourth quarter of this year, putting off a full realization of the expected cost savings and benefits from shared equipment and staff. It reiterated the timeframe on Friday. The two companies have operations in West Texas, South Texas and North Dakota's shale fields. BY THE NUMBERS The Conoco-Marathon combination would create a company pumping 2.26 million barrels of oil and gas per day, and add 1.32 billion barrels of proved reserves to ConocoPhillips' 6.8 billion. The offer of 0.255 shares of ConocoPhillips for each share of Marathon represented a 14.7% premium to the company's pre-deal closing price. Sign up here. https://www.reuters.com/markets/deals/conocophillips-marathon-oil-get-second-us-ftc-request-over-225-bln-deal-2024-07-12/

2024-07-12 11:00

July 12 (Reuters) - Norwegian oil company Aker BP (AKRBP.OL) New Tab, opens new tab, which is partly owned by BP (BP.L) New Tab, opens new tab, reported on Friday a lower-than-expected profit for the second quarter and reiterated a recently increased full-year output forecast. Profit before interest and tax rose to $2.30 billion from $2.26 billion a year earlier, against a $2.36 billion forecast in a poll of analysts compiled by Aker BP. The company reiterated its production forecast raised in a trading update on July 3 at 420-440 thousand barrels of oil equivalent per day (mboepd), against previous guidance of 410-440 mboepd. Second-quarter output was 444,1 mboepd. It said all field development projects progressed as planned in the quarter. (This story has been corrected to say that the company reiterates its output guidance, instead of raises, in the headline and in paragraphs 1 and 3) Sign up here. https://www.reuters.com/business/energy/aker-bps-q2-profit-rises-less-than-expected-cuts-output-forecast-2024-07-12/

2024-07-12 10:55

AMSTERDAM, July 12 (Reuters) - The Dutch government must follow a special procedure under European rules and cannot simply decide to reduce the number of flights at Schiphol Airport, one of Europe's busiest hubs, the Dutch Supreme Court said on Friday. WHY IT'S IMPORTANT Even though the previous government had already suspended the plan to limit Schiphol's flight movements to 460,000 per year, the decision is important for concerned airlines as it rules out any uncertainty for travellers and the sector. It also overturned an earlier judgment by an Amsterdam court that said the Dutch State was allowed to implement two proposed measures to reduce noise pollution at Schiphol. KEY QUOTES "The decision of the Amsterdam Court of Appeal that the Dutch State was allowed to implement two proposed measures to reduce noise pollution at Schiphol will not be upheld. Based on European rules, a balanced approach procedure must be followed (to implement) the measures", the Supreme Court said in its statement. "KLM agrees with the clearly substantiated ruling of the Supreme Court", KLM, Air France's AIRF.PA Dutch arm, said in a statement on Friday. Sign up here. https://www.reuters.com/business/aerospace-defense/dutch-court-says-government-must-follow-eu-procedure-reduce-flights-schiphol-2024-07-12/