Exxon Mobil Corp. (NYSE:XOM): Closing price $86.90
On Friday, Exxon Mobil, along with its partner Rosneft Oil Co., announced that it has been awarded Chicago Bridge & Iron and Foster Wheeler preliminary front end engineering and design contracts for a proposed LNG facility in Russia’s far east. The two firms will obtain separate agreements to work out details that include an LNG plant site, gas liquefaction, construction, and environmental assessments, with a second phase beginning in 2014. It is expected that the 5-million tons per annum facility will be supplied with natural gas from Rosneft reserves from the Far East and Sakhalin areas. Rosneft President Igor Sechin commented that, “With our initial FEED contractors on board now we will see the project begin to take shape in a matter of months.”
Petrobras – Petróleo Brasileiro (NYSE:PBR): Closing price $15.40
Workers at the 210,000 barrel-per-day oil refinery in Grangemouth, Scotland, voted Friday in favor of strike action, increasing fears of disruption to North Sea oil supplies that could drive up the benchmark oil price. Steam from the Grangemouth refinery, owned by PetroIneos, powers the adjacent Kinneil terminal, which receives oil from a pipeline carrying North Sea Forties, one of the four crudes that supports the Brent oil benchmark. One trader opined that, “It could be very bullish for Brent due to the Kinneil tie-up with the refinery.”
Marathon Oil Corp. (NYSE:MRO): Closing price $34.90
Analyst Amir Arif at Stifel, in a report published Friday, downgraded Marathon Oil from Buy to Hold, and also removed the $37 price target. In his report, Stifel wrote, “We are downgrading MRO from Buy to Hold given the lack of meaningful upside to our prior target price/fair value and expectations for lackluster third quarter results. Although MRO remains a value stock, we do not expect the valuation discount to narrow in the coming 6-12 months given that production will sequentially decline in the third quarter, key 2013 upside exploration wells already having been reported on, and our expectation for subpar 2014 production growth rate of 3 to 5 percent. As a result, MRO should remain a value name and we expect MRO to relatively underperform its peers and possibly underperform on an absolute basis if crude oil eases off further for the remainder of 2013 given its higher crude oil weighting.”
BP (NYSE:BP): Closing price $42.80
BP will struggle to reduce fines that could hit $18 billion in a new phase of the Gulf of Mexico trial that will decide how much oil it spilled in 2010, and evaluate its efforts to plug its well. Beginning Monday in New Orleans, this second of three phases of a trial determining responsibilities for the marine pollution could, in the worst case scenario for the British firm, land BP with a bill five times larger than the $3.5 billion it has reserved for fines. Its yearly earnings, based on last quarter, are running at roughly $17 billion.
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