Stocks Rise as Fed Chairwoman Says She’ll Stay the Course

Log in to manage your products and services from The New York Times and the International New York Times.

Don't have an account yet?
Create an account »

Subscribed through iTunes and need an NYTimes.com account?
Learn more »

Jeff Shell, TV Executive, to Take Over at Universal Studios

NBCUniversal said that the executive, Jeff Shell, a Comcast insider who has recently been focused on the media conglomerate’s international businesses, will take over day-to-day operations at Universal Studios, which includes the Universal and Focus Features labels. For the last 18 years, those duties have fallen to Ron Meyer, who will step into a kind of senior statesman role across the company.

By naming one of its own to succeed Mr. Meyer — rather than promoting a Universal executive — Comcast signaled that the movie studio is now firmly nested inside a corporate structure that cares as much about funneling content to cable video-on-demand services as it does about theatrical hits. Comcast has made multiple changes on the television side of NBCUniversal, but it has largely left the film and theme park unit alone, leading to speculation about its future.

“I have worked with him for over a decade and have been consistently impressed by his strategic vision, operational focus and energy,” Steve Burke, NBCUniversal’s chief executive, said of Mr. Shell in a statement.

Adam Fogelson, the chairman of Universal Pictures, will leave the company after 15 years. A former movie marketer, Mr. Fogelson found hits in films like “Fast & Furious 6,” “Despicable Me 2” and “Ted” — notably leaving behind a long fallow period for the studio. But Mr. Fogelson was also behind flops like “R.I.P.D.” and “Battleship.” Coming up is “47 Ronin,” a samurai film that has suffered cost overruns.

Mr. Fogelson’s deputy, Donna Langley, will take over his job. “She has been a driving force behind Universal’s current successes,” Mr. Burke said.

Mr. Meyer, 68, the longest-serving chief of a major studio, will become the vice chairman of NBCUniversal, which Comcast bought in 2011. A consummate Hollywood player — he co-founded Creative Artists Agency — Mr. Meyer is known for leading Universal through disruptive ownership changes; the studio has been bought and sold at least four times in recent decades.

Regime change has recently been sweeping Hollywood. Universal joins 20th Century Fox, Walt Disney Studios and Warner Brothers, all of which have undergone executive shuffling over the last year and a half, for various reasons.

The continued presence of Mr. Meyer, who was signed to a contract that extends into 2017, is intended in part to ensure stability while Mr. Shell, 48, who is not known in film circles, gets up to speed. Mr. Shell helped manage overseas film distribution and marketing as chairman of NBCUniversal International, but he has largely spent his career in television. He previously ran Comcast’s cable networks, which include E! and Style.

Before joining Comcast, Mr. Shell was chief executive of TV Guide International. Earlier in his career, he logged time at News Corporation, where he helped oversee Fox Sports, FX and the National Geographic Channel.

E.U. Investigates Shell and Others on Oil Market Pricing

Authorities have sharpened scrutiny of financial benchmarks around the world since slapping large fines on some of the world's biggest banks for rigging interest rate benchmarks.

On Tuesday, the European Commission said it was investigating major oil companies over suspected anti-competitive agreements related to submission of prices to leading oil pricing agency Platts, a unit of McGraw Hill Group.

"Officials carried out unannounced inspections at the premises of several companies active in and providing services to the crude oil, refined oil products and biofuels sectors," the Commission said. The inspections took place in two EU member states and one non-EU country, it said.

"The Commission has concerns that the companies may have colluded in reporting distorted prices to a price reporting agency to manipulate the published prices for a number of oil and biofuel products," it said.

The Commission also said companies may have prevented others from participating in the price assessment process, with a view to distorting published prices.

Statoil said the suspected violations were related to the Platts price assessment process and may have been ongoing since 2002.

The probe will shine a light on the methodology designed by Platts for daily assessments on the physical oil markets, used to close deals worth billions of dollars.

The so-called Platts window, or market-on-close (MOC) system, is a daily half-hour period in which it determines cash prices through a series of bids, offers and trades.

Critics say the system is only a snapshot of the market, because it excludes trade outside the window - one reason that it can be vulnerable to manipulation.

"I remember looking at these sorts of issues 10 years ago, and nothing has changed, it's sort of an accident waiting to happen," said Craig Pirrong, Professor of Finance at the University of Houston, noting that after the Libor scandal, price assessment agencies were under "incredible scrutiny."

"Regulators and law enforcement officials are quite upset with this sort of alleged conduct and they have proven that they are willing to go after companies that misreport for very large sums of money," Pirrong said.

"Potentially the exposure is quite large."

PRICE DISTORTIONS

The Commission said that even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers.

It added the fact inspections had been carried out did not mean the companies were guilty of anti-competitive behavior.

The Commission did not make clear whether it was investigating a specific incident. These investigations typically take years to draw final conclusions.

Platts, Royal Dutch Shell, BP and Statoil said they were cooperating with the probe.

French major Total said there had been no inspections at its offices. The Commission did not list the companies being investigated, and it was not clear whether other companies were included.

Statoil said authorities had inspected its office in Stavanger on the request of the European Commission on suspicions of anti-competitive behavior.

The Norwegian state, the controlling shareholder of Statoil, said the probe was a matter for the company's management to handle and declined further comment.

Platts said the European Commission had "undertaken a review at its premises in London this morning in relation to the Platts price assessment process".

The International Organization of Securities Commissions (IOSCO) is running a wider review of benchmarks, and the U.S. Commodity Futures Trading Commission is looking into the setting of gold and silver prices in London.

IOSCO said it was not involved in the oil enquiry. The CFTC declined to comment, and the Federal Trade Commission had no immediate comment.

Thomson Reuters, parent of Reuters news, competes with Platts in providing news and information to the oil market.

(With additional reporting by Barbara Lewis in Brussels, Matthew Robinson in New York, Diane Bartz in Washington; Editing by Jane Baird and Chris Reese)

Shell Makes Big Bet on Boom in Natural Gas

More than any of its rivals, Royal Dutch Shell, which will report its quarterly results on Thursday, is betting its future on the business of bringing natural gas from remote locations like Qatar to energy-hungry destinations like China and Japan.

And while analysts expect the results to show a sharp decline from last year’s first quarter, in part because of disruptions in its Nigerian gas operations, many experts say Shell may eventually show big benefits from its natural gas emphasis.

Increasingly, to make gas a global commodity, companies supercool it into a liquid form for transport on specialized ships. Shell has already invested about $40 billion in liquefied natural gas, or L.N.G., production plants, storage terminals and related systems, and plans to continue pumping money into that business.

Shell now has about 7 percent of the world L.N.G. business, with ambitions to more than double that share through new projects and acquisitions. Last year, L.N.G. and related businesses earned Shell $9.4 billion of its $25.1 billion in profit.

“We are in the lead, and we want to stay in the lead,” Andrew Brown, Shell’s head of international exploration and production, said in a mid-April interview. Mr. Brown said Shell expected global demand for L.N.G. to grow rapidly in the coming years, doubling by 2025 to about 500 million tons a year, the equivalent of about 4.5 billion barrels of oil, making it by far the fastest-growing fuel.

The main reason for the anticipated growth is that natural gas is abundant. And because of the U.S shale gas boom, it has become relatively cheap — especially in North America, where prices lately have been in the range of $4 per million British thermal units, compared with highs of $13 as recently as 2005. The European spot price is around $10 per million B.T.U.’s, and the Asian price around $15; contract prices, often linked to oil, may be higher.

And because it burns much cleaner than either coal or oil, it will very likely stay in favor because its use can help lower the greenhouse gas emissions that are blamed for causing global warming.

To Mr. Brown’s frustration, not everyone gets the message. That is one reason Shell’s big L.N.G. bet is no sure thing.

The United States has wholeheartedly embraced gas. But Europe, mired in economic doldrums, has turned to coal, which is less expensive. This has driven down demand for gas in the region, which in recent decades had been one of the world’s biggest markets for natural gas via pipelines and L.N.G.

Europe does not have “the right balance” in terms of promoting gas, Mr. Brown said. About 75 percent of Shell’s L.N.G. goes to Asia.

As much as anyone, Mr. Brown is responsible for making Shell a gas broker to the world. Before taking his current job, Mr. Brown presided over more than $20 billion in investments in gargantuan installations for turning the extensive gas deposits in Qatar’s North Field into exports in the form of L.N.G. and liquid fuels like diesel.

To build on its lead, Shell agreed in February to buy the L.N.G. business of the Spanish company Repsol for about $6.7 billion. Some industry analysts considered the price too high. But according to Repsol, Shell had to outbid more than dozen competing offers.

The impact of Shell’s L.N.G. investments on the company’s financial performance will, of course, fluctuate from quarter to quarter. The first-quarter results on Thursday are expected to be hurt by a shutdown at a Nigerian L.N.G. plant caused by sabotage. And yet, Shell’s quarter was probably helped by high L.N.G. prices in Japan, which continues to import large quantities of gas since the Fukushima nuclear meltdown in 2011.

Analysts’ consensus forecast anticipates that Shell will report adjusted net profit of $6 billion for the quarter, an 8 percent gain over the preceding quarter, but an 18 percent decline from a year earlier, according to Peter Hutton of RBC Capital Markets in London.

On Tuesday, one of Shell’s main rivals, BP, reported a first-quarter profit of $4.2 billion after adjusting for inventory changes and one-time items, which handily beat analysts’ forecasts. BP, though, continues to emphasize its oil business.

Over the longer run, being a big player in L.N.G. is likely to help Shell outearn its peers, predicted Martijn Rats, an analyst at Morgan Stanley in London. The huge upfront investments of several billion dollars per gas liquefaction plant might seem prohibitive, Mr. Rats said, but those projects “generate large amounts of operating cash flow over two or three decades.”

Shell Oil Rig Runs Aground in Alaska

The rig, the Kulluk, which was used for test drilling in the Arctic last summer, is carrying about 139,000 gallons of diesel fuel and 12,000 gallons of lubricating oil and hydraulic fluid, the officials said.

A Coast Guard helicopter flew over the rig after the grounding at 8:48 p.m. and “detected no visible sheen,” said Darci Sinclair, a spokeswoman for a unified command of officials from Shell, Alaskan state agencies and other groups that has been directing the response since the troubles with the rig began last Thursday.

Ms. Sinclair said that more overflights were planned after daybreak on Tuesday, and that the unified command would be monitoring the fuel situation as it planned further actions. “The focus will be around salvage,” she said.

The 266-foot diameter rig ran aground on the east coast of Sitkalidak Island, an uninhabited island that is separated by the Sitkalidak Strait from the far larger Kodiak Island to the west. The nearest town, Old Harbor, is across the strait on Kodiak Island; it has a population of about 200 people.

Ms. Sinclair said the coast where the Kulluk ran aground has a combination of rocky and sandy terrain.

Earlier Monday, a Shell spokesman had said that the rig had been brought under control after towlines were reconnected to two ships during a break in what had been several days of extremely rough seas and high winds.

But late Monday afternoon the line from one of the ships, the Aiviq, became separated. Then several hours later, the other ship, the Alert, was ordered to disconnect its towline, out of concern for the safety of the ship’s nine-person crew. At the time, Ms. Sinclair said, swells were as high as 35 feet and winds were gusting up to 65 miles an hour.

The Kulluk, one of two rigs that Shell used to drill test wells off the North Slope of Alaska as part of the company’s ambitious and expensive effort to open Arctic waters to oil production, was being towed by the Aiviq to a Seattle shipyard for off-season maintenance when the towline initially separated during a storm on Thursday.

The Aiviq then lost power, and other support ships and a Coast Guard cutter were brought in to help with engine repairs and to reconnect towlines to the Kulluk, which does not have its own propulsion system. The 18 workers aboard the rig were evacuated by Coast Guard helicopters on Saturday.

Over the weekend, support crews struggled in 25-foot swells to reconnect towlines, succeeding several times. But each time the lines separated again, leaving the rig in danger of drifting toward land.

The Kulluk, which was built in Japan in 1983 and upgraded over the past six years at a cost of $292 million, is designed for icy conditions in the Arctic. It can drill in up to 400 feet of water and up to 20,000 feet deep. During drilling season it carries a crew of about 140 people, Mr. Smith said.

Shell has spent six years and more than $4 billion in its effort to drill in Arctic waters, one of the last untapped oil-producing regions in the United States. But the effort has faced regulatory hurdles and opposition from American Indian and environmental groups.

Last summer, the Kulluk drilled a shallow test well in the Beaufort Sea while another rig drilled a similar hole in the Chukchi Sea to the west.

But Shell announced in September that it would be forced to delay further drilling until this year after a specialized piece of equipment designed to contain oil from a spill was damaged in a testing accident.

The episode was one of a number of setbacks for the Arctic drilling program last year.

Shell now says it hopes to drill five exploratory wells in the region during the 2013 drilling season, which begins in mid-July.