Mar. 4 2011 - 12:05 pm
Posted by Trefis Team

ConocoPhillips is the third largest oil company in the U.S. It operates in all sectors of the oil and natural gas industry such as exploration and production, midstream, refining and marketing, and petrochemicals. Its main competitors are Exxon Mobil, British Petroleum, Anadarko and Chevron. We look at scenarios for two factors relating to oil price and production and discover that in the short to medium term, the benefits from higher oil prices on its stock price outweigh any drop in value from production disruptions.

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The Obama administration has its share of headaches: a possible government shutdown, Arab unrest, the union uprising. The real migraine may be a firestorm over gasoline prices.

Oil last week topped $100 a barrel, and gas has hit $4 a gallon in pockets of the country. The price is expected to keep heading up. This pain is being felt by a public still dazed by recession.

An immutable fact of expensive gasoline: Americans will find someone to blame. We can expect in coming months to hear many sober analysts attempt to explain the complex reasons for rising oil prices: inflation, Middle East tremors, growing demand. Expect, too, for all those reasons to vanish behind what most Americans will see as the far more obvious (and graspable) cause: President Obama's regulatory assault on domestic oil and gas production.

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By Margot Habiby - Mar 4, 2011 1:46 PM MT

Oil rigs operating in the U.S. jumped by the most this year as prices climbed to a 29-month high, according to data published by Baker Hughes Inc. (BHI) The number of natural gas rigs dropped to a one-year low.

Oil rigs climbed 18 to 801, the biggest one-week increase since the seven days ended Dec. 10, Baker Hughes said on its website. It was the count's first advance in four weeks.

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By LARRY MARGASAK, Associated Press
Published 03/06/11

WASHINGTON, D.C. - Industry officials say with confidence that 7.3 million jobs will disappear if the Obama administration goes through with tighter rules to reduce smog. The industry-sponsored researcher who came up with that number isn't so sure.

"There's uncertainty around that," economist Don Norman said of the "shockingly high" job loss number he extrapolated using a study sponsored by the oil and natural gas industry's American Petroleum Institute and covering just 11 states.

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Posted: March 6, 2011 - 4:56pm
Associated Press

CAMBRIDGE, Mass. - A Massachusetts biotechnology company says it can produce the fuel that runs Jaguars and jet engines using the same ingredients that make grass grow.

Joule Unlimited has invented a genetically engineered organism that it says simply secretes diesel fuel or ethanol wherever it finds sunlight, water and carbon dioxide.

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WASHINGTON (AP) - President Barack Obama's chief of staff says the administration is looking at the nation's oil reserves as it considers options for dealing with the spike in gas prices.

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By ANNE C. MULKERN of Greenwire
Published: February 28, 2011

As the price of oil climbs over $100 a barrel, it's fueling arguments for congressional action from groups with very different agendas.

The corn ethanol industry and farm groups say it underscores why Congress shouldn't block federal support for the biofuel. Wind's trade group argues that switching to plug-in vehicles powered by turbines would improve fuel independence. Securing America's Future Energy, a group of corporate executives and retired military personnel, seeks a slate of changes it believes will help shrink dependence on foreign petroleum.

"When oil prices get high, it's just an opportunity for all of these folks with disparate interests to draw attention to their concerns," said Adele Morris, policy director for climate and energy economics at the Brookings Institution.

"It's hugely popular" as a tactic, Morris added, because "even if there's no logical relationship it's always tempting to espouse your favorite technology as the solution."

For now, Congress appears to be paying attention.

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By Ben Geman and Andrew Restuccia
02/28/11 08:22 PM ET
Interior Secretary Ken Salazar will appear Thursday before Hastings' panel to discuss Interior's budget plans, but drilling is certainly to be a major topic for lawmakers. Salazar will appear before the Senate Energy and Natural Resources Committee Wednesday.

A major industry groups had strong words for the Interior Department after the decision. The American Petroleum Institute - the industry's most powerful trade association - said the permit was "welcome news," but then went back on the attack.

"This slow moving process continues to stifle domestic production and puts thousands of jobs at risk in the Gulf and around the country," said API President Jack Gerard in a statement.

But Michael Bromwich, the Interior Department's top offshore drilling official, put some of the onus back on his critics. Speaking on a conference call with reporters, he noted that Interior will be able to act more quickly on permit processing if it gets the increase in funding the agency is seeking.

Interior is seeking $358 million for its Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), a 50 percent increase above fiscal year 2010 levels.

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Monday, 28th February, 2011
By Ibrahim Kasita

ROYAL Dutch Shell has just completed divesting its majority interest in 14 African countries to Swiss firms, Vitol Group and Helios Partners, in a $1b deal.

This is the latest withdrawal of oil majors from Uganda and other 20 African countries, and is part of the growing trend of shifting away from retail and marketing to exploration and production, where returns on investments are high.

Esso (ExxonMobil), Agip, Mobil, BP, Caltex (Chevron) and now Shell have given up their African downstream businesses, which have been a combination of production, refining, transporting and oil marketing.

These oil majors used to control over 70% of oil supplies and distribution in Africa. However, in a bid to re-adjust to the fast-moving global oil business realities, they have changed strategy to controlling oil supply, where 80% of profits are made.

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FEBRUARY 28, 2011, 3:20 P.M. ET
By Ben Lefebvre, Dow Jones Newswires

HOUSTON (Dow Jones)--A spike in crude oil prices is boosting already record demand for ethanol as the corn-based fuel additive increasingly becomes cheaper than gasoline.

Yet U.S. ethanol producers have all but saturated the domestic market. Ethanol exports, already at record highs, are likely to be the main beneficiary as oil prices outpace corn costs, with producers and refiners expecting foreign shipments to increase.

Ethanol for March delivery recently traded at $2.56 a gallon on the Chicago Board of Trade, about 33 cents below reformulated oxygenated blendstock, or RBOB, a common gasoline blend traded on the New York Mercantile Exchange. Ethanol is now at discounts to RBOB not seen since early January.

Yet domestic gas stations currently are unable to increase the amount of ethanol in their fuel mix--most current infrastructure doesn't allow ethanol blends higher than E10, or 10% ethanol, 90% gasoline.

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