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Argentina offers Repsol $5B compensation for YPF

Spanish energy company Repsol would get $5 billion in compensation from Argentina for the expropriation last year of the firm’s YPF unit and its vast holdings of unconventional oil and gas fields, a person with direct knowledge of the preliminary deal said Tuesday. Under terms of the proposal to be considered Wednesday by Repsol’s board, the Spanish company would get the money in Argentine bonds denominated in U.S. dollars. In return, it would drop legal action against Argentina for expropriating Repsol’s controlling stake in YPF in 2012 without payment, said the person, who was not authorized to disclose details and spoke on condition of anonymity. Investors on Tuesday cheered the news, sending Repsol shares up 4.28 percent to close at 19.24 euros ($26.03) in Madrid. News of the deal came late Monday after Repsol executives met in Buenos Aires with government officials from Argentina […]

Posted On : Published By : Tom Whipple
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How China took control of an OPEC country's oil

China’s aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador. Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days. Calvopiña grew anxious and threatened to leave. "If the Phase III transaction documents are not signed in the coming days, then I cannot remain in Beijing," he wrote in a confidential letter to China Development Bank (CDB), reviewed by Reuters. In reality, Calvopiña had little choice but to wait. Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, […]

Posted On : Published By : Tom Whipple
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How China took control of an OPEC country’s oil

China’s aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador. Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days. Calvopiña grew anxious and threatened to leave. "If the Phase III transaction documents are not signed in the coming days, then I cannot remain in Beijing," he wrote in a confidential letter to China Development Bank (CDB), reviewed by Reuters. In reality, Calvopiña had little choice but to wait. Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, […]

Posted On : Published By : Tom Whipple
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Auto sales boom spawns a used car market in China

As car enthusiasts converge on the annual Guangzhou auto show, few have anything except a shiny new set of wheels in mind. But explosive growth that transformed China into the world’s largest auto market is also giving life to a new industry here: used cars. Chinese started buying new cars in huge numbers about four years ago, about the average length of time analysts say drivers will stick with a vehicle before trading it in for a fresh model. The secondhand market is already taking off, with sales growth last year outpacing that for new vehicles. By volume it is still dwarfed by new cars, which outsold used vehicles three to one. In countries such as the U.S., that ratio is reversed, highlighting the secondhand market’s vast potential to make car ownership affordable for millions more Chinese. The challenge in China is to […]

Posted On : Published By : Tom Whipple
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Asian Oil Grab Drives Tanker Rates to 3 1/2-Year High: Freight

Record Asian oil demand is spurring the region’s refineries to charter the most supertankers in a year, driving shipping rates to the highest level since 2010. Traders hired enough carriers in the spot market from owners including Frontline Ltd. (FRO) and Mitsui O.S.K. Lines Ltd. to load 35.9 million metric tons in the four weeks ended Nov. 24, according to data compiled by Bloomberg from broker reports. The shipments, the largest this year, expanded 53 percent since the end of August, during which time a glut of shipping capacity in the Persian Gulf shrank by about the same amount. Asian economies are growing about three times faster than the global average, spurring the International Energy Agency , an adviser to 28 nations, to predict the region’s oil demand will rise to a record this quarter. Earnings from the tankers jumped to $50,801 a day on Nov. 22, a 34-fold […]

Posted On : Published By : Tom Whipple
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Pakistan Breaks Ground on Nuclear Power Plant Project With China

Prime Minister Nawaz Sharif on Tuesday ceremonially broke ground on a $9.59 billion nuclear power complex to be built in Karachi with China’s help, seeking to ease Pakistan’s long-running energy crisis and signaling a new step by China in becoming a top nuclear supplier. The deal, which officials said was still being finalized, is a major new advance in energy cooperation between the two countries, dwarfing previous reactor projects built along with China at Chashma, in Pakistan’s interior. And it establishes a growing counterpoint to a nuclear axis between the United States and India in recent years that Pakistani officials have seen as an irritant and Chinese officials have seen as a geopolitical challenge. “The beginning of the 2,200-megawatt power project is indeed a proud moment in the energy history of Pakistan,” Mr. Sharif said at the ceremony, adding that the construction was to be completed […]

Posted On : Published By : Tom Whipple
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Pacific region faces economic risk from climate change: ADB

MANILA, Nov. 26 (UPI) — The Pacific region could experience economic losses of as much as 12.7 percent of annual gross domestic product by 2100 as a result of climate change, an Asian Development Bank report warns. The ADB report — “Economics of Climate Change in the Pacific” — focuses on 14 developing Pacific nations: the Cook Islands, Fiji, Kiribati, Republic of the Marshall Islands, the Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu. The bank says most of the countries will see average annual temperatures rise by 3.24 degrees Fahrenheit by 2050. “If the world were to stay on the current fossil-fuel intensive growth model — the business-as-usual scenario — total climate change cost in the Pacific is estimated to reach 12.7 percent of annual gross domestic product equivalent by 2100,” the ADB report, released Tuesday, states. Of the […]

Posted On : Published By : Tom Whipple
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Methane Emissions in U.S. Probably Top Estimates: Study

U.S. emissions of methane — a greenhouse gas — are probably 50 percent higher than current estimates show, according to a study published yesterday in the Proceedings of the National Academy of Science. The study estimated emissions in 2007 and 2008, using measurements on the ground, in telecommunications towers and from aircraft for a comprehensive inventory of the second most abundant greenhouse gas after carbon dioxide. It found that the U.S. now underestimates methane releases from the raising of livestock and the extraction of oil and natural gas. That may mean methane has a bigger role in climate change than now thought, as state officials and the U.S. Environmental Protection Agency consider new rules designed to limit emissions that may lead to global warming. “Methane is a powerful climate change pollutant, and the study gives greater impetus to the EPA and states to establish stronger standards to reduce leaks […]

Posted On : Published By : Tom Whipple
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Coal's Decline Hits Hardest in the Mines of Kentucky

Since he was laid off from his mining job in January, William Hensley’s life has been upended. Days after he lost his position, Mr. Hensley, 50 years old, said he was diagnosed with black lung disease. The bank soon took back his 2012 Chevy Suburban, after he was unable to make the $600 monthly payments. He can no longer afford health insurance and has drawn down all but $5,000 he had in a 401(k) retirement plan to pay for another vehicle and living expenses. Mr. Hensley, who is raising his 12-year-old granddaughter with his wife, went from making $82,000 a year as an underground foreman to collecting about $15,000 in unemployment benefits this year. But that aid is set to run out in December and mining jobs are scarce. “This is the worst I’ve ever seen it,” said Mr. Hensley, who has spent 32 years of his life […]

Posted On : Published By : Tom Whipple