BP, Shell, Edison Request US, EU To Help In Dispute With Venture Global LNG Over Undelivered Cargoes: Report

Oil companies BP PLC BP, Shell PLC SHEL, and Edison International EIX reportedly asked a U.S.-EU energy group to intervene in their ongoing dispute with liquefied natural gas (LNG) exporter Venture Global LNG over its failure to supply contracted cargoes.

The companies had appealed to the U.S.-EU Task Force on Energy Security last month, and a Shell executive urged them to require Venture Global to "immediately begin to perform" under their signed contracts, as per Reuters.

In the letter, Shell accused Venture Global of diverting resources into building a second LNG export plant rather than completing repairs to its first plant.

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In a separate letter, a BP executive stated that Venture Global's behavior "has shaken confidence in the trustworthiness of American LNG suppliers," and raised the question of whether the plant should be allowed to operate and export under rules governing construction.

As per Venture Global LNG spokesperson, the officials from the EU and U.S. indicated they view the dispute as "a contractual matter between commercial parties," and no action was taken on Shell's request, as per the report.

The report quoted Shell's spokesperson as saying that 'it was not expecting an immediate reaction by the task force, and wanted to bring a potential loss of trust in U.S. LNG to officials' attention.'

Notably, as per the letter signed by Venture Global Co-Chairman Michael Sabel and Robert Pender this month, Shell has purchased 7 commissioning cargoes from Venture Global (3 of them traded outside Europe for higher profits), and BP has purchased 6 commissioning cargos (2 traded outside Europe).

Last month, Energy Giant Shell reported a Q3 FY23 adjusted earnings per ADS of $1.86, above the consensus of $1.83 and a revenue decline of 20.3% year-over-year to $76.35 billion, missing the consensus of $82.96 billion. 

Also, BP reported Q3 sales and other operating revenues came in at $53.27 billion, missing the consensus of $57.71 billion. Underlying RC profit per American Depositary Share (ADS) came in at $1.15, missing the consensus of $1.38. 

Price Action: SHEL shares are trading lower by 0.12% at $65.51, and BP shares are trading higher by 0.17% at $35.14 premarket on the last check Monday.