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Oil price: Shell-BG deal at risk?

The low oil price puts a question mark over the £43bn Shell-BG deal, The Telegraph’s deputy business editor Ben Marlow writes.

Both Shell and BG have been hit by low oil prices, according to their financial results. Last week, Shell posted a net loss of $7.4 billion after Arctic exit while BG’s profits were down by 37%. BG said that its increased production meant low prices had impacted the firm disproportionately.

The takeover could also be at risk from BG’s LNG business taking a big hit – which is a problem as that’s how Shell justified the deal to its shareholders.

Shell CEO Ben van Beurden said the BG deal remains on track for completion in early 2016.

Oil price: International oil companies’ profits sink

Apart from Shell, Chevron and Exxon Mobil also reported declining earnings. Chevron is slashing its workforce by 10%. Exxon’s Q3 profits were almost half of what they were in the corresponding quarter last year.

According to Forbes, the big ten IOCs are preparing for a break-even oil price of $60per barrel for the coming years to 2018. The FT writes that the oil price is now out of the control of producers, as it had been in the past, and “if the world is to shift away from fossil fuels, therefore, governments will need to take deliberate policy actions to make that happen.”

As for the oil price that is the underlying problem for the IOCs, crude ended the month below $50 per barrel though futures were up 3%.

Amid the reduced oil price, Saudi Arabia’s credit rating has been downgraded by S&P as its economy moved into deficit.

Gas: Path cleared for huge Israel and Noble deal

The Israeli economy minister has resigned. He opposed a multi-billion gas deal with Noble Corp, but now PM Netanyahu will approve the project, which has been a subject of controversy over fears of a monopoly.

Israel’s offshore gas fields are predominantly owned by Noble and Israel’s Delek Group.

Former economy minister Arieh Deri was joined by the Antitrust Authority’s former commissioner, David Gilo in resigning.

Netanyahu said the deal would mean energy independence for the nation.

UK wind: Offshore wind plans to go ahead

Dong Energy is building the world’s largest offshore wind farm near Blackpool. The 660 MW Walney Extension - larger than the London Array – will be completed in 2018.

Meanwhile funding has been secured for a delayed £1.5bn wind farm off the coast of Suffolk. RWE’s Galloper project has three new partners after SSE pulled out last year.

And a Statoil floating turbine pilot has been given the go-ahead off the coast of Peterhead, Scotland.

In other news

Peabody Energy bonds drop 5.8% during trading - and stocks are down 43% – after it had its rating downgraded by a couple of analysts

Turning brownfields into greenfields: From coal to clean energy

FT: Coal left unloved as natural gas and fossil-free drives bite

China to initiate nore policies encouraging renewable energy in its five-year economic plan and China considers price cuts to subsidies for solar, wind generators

India:Renewable capacity addition jumps 49% in H1

Renewables key in race against climate change clock – Phys.org

The World’s Biggest Companies on Why They Buy Renewables: ‘It’s a Very Clear Economic Issue’

USDA awards funding to 1,114 rural renewable energy & energy efficiency projects