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Shipping Rates Drop as China Hydro Power Cuts Coal Need

Record production of hydropower from China ’s Three Gorges and newer dams is displacing so much coal that rates to transport it have plunged to about record lows, roiling the shipping market. Daily earnings for Panamaxes, vessels that are about 750 feet long and get most of their spot cargoes from hauling coal, slumped as much as 76 percent this year, getting to within $26 of an all-time low. China started hydroelectric plants this year with enough generation to replace 26 million tons of coal, or about 370 cargoes, data compiled by Bloomberg show. The extra power means less imports and weaker freight rates, Morgan Stanley estimates. While global shipments of iron ore and grain are rising, China’s decreasing appetite for imported coal is a challenge to transporters already seeing weaker rates because of an oversupply of Panamaxes. The world’s second biggest economy’s efforts to curb air pollution will […]

Posted On : Published By : Tom Whipple
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CGG Plans to Cut Fleet, Jobs After Second-Quarter Loss

CGG SA (CGG) , a seismic surveyor of oilfields, will cut jobs and accelerate reductions in its fleet of vessels after delayed orders led to a second-quarter loss. CGG will shrink its fleet to 13 vessels from 18 by the end of the year and cut about 10 percent of its workforce, or more than 1,000 jobs worldwide, the company said in a statement. Sites in Norway, Nigeria and Venezuela will be closed. That’s an acceleration of the plan unveiled in December for a 25 percent reduction in the capacity of its marine fleet through 2016, Chief Executive Officer Jean-Georges Malcor said on a conference call. The company is “clearly at ease” with its leverage and doesn’t need a capital increase, he said. The surveyor has suffered a drop in demand as oil explorers defer orders for seismic studies to curb spending. CGG deploys equipment that drags behind ships […]

Posted On : Published By : Tom Whipple
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Wyoming Regulators: Setbacks between Wells, Housing May Be Widened

The spacing between oil and gas wells and residential homes has been an issue that several states have taken up as fracking becomes more widespread and moves closer to existing neighborhoods. Wyoming is the latest state to take up the issue. However, before the Wyoming Oil and Gas Conservation Commission, the state’s regulative entity on oil and gas, even comes out with its proposal, residents and the energy industry are already critical. The current spacing in Wyoming between homes and oil wells is 350 feet, according to the Casper Star Tribune. That is less distance than in most other municipalities. The setback in North Dakota and Colorado is 500 feet, while Texas leaves it up to municipalities to decide the distance. Fort Worth requires a spacing of 600 feet, while in Dallas, the distance is 1,500 feet. In Coppell, Texas, wells are prohibited 1,000 feet from a residential or […]

Posted On : Published By : Tom Whipple
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Exxon Bets on Russia as Rivals Stick to U.S. Wells

As Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc, the world’s largest oil companies, bet on increasing production from Russia, smaller rivals are boosting crude supplies by exiting foreign fields to focus on booming U.S. wells. ConocoPhillips, Occidental Petroleum Corp. (OXY) and Apache Corp. reported rising second-quarter output as they divest international assets. Nationwide, U.S. oil production is at a 25-year high because of advanced drilling techniques that cracked petroleum-rich shale formations. Meanwhile, Exxon’s shares fell the most in almost three years after reporting quarterly oil and natural gas output decreased 5.7 percent to the equivalent of 3.84 million barrels a day, the lowest since the third quarter of 2009, according to data compiled by Bloomberg. Exxon is searching Russia ’s Arctic seas for crude as part of a global effort by the Irving, Texas-based company to halt a trend of declining output. “Exxon and companies of similar […]

Posted On : Published By : Tom Whipple
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Sberbank says sanctions hit global financial system

The headquarters of the biggest Russian bank Sberbank in Moscow, Russia, 03 June 2009. Nizhny Novgorod-based Oleg Deripaska’s GAZ Group, Sberbank and Canadian autoparts maker Magna intend to purchase controlling stake in General Motors’ Opel division, newspaper Delovoy Kvartal reports. EPA/SERGEI CHIRIKOV Sberbank , Russia’s largest lender, said on Friday that its partial blocking from European capital markets under EU sanctions would do nothing to ease the Ukraine crisis . “Including Sberbank of Russia, which has no relation to the geopolitical processes, to the sanctions list undermines the foundations of the global financial system and does not contribute to the easing of the European crisis caused by the situation in Ukraine,” the lender said in a statement, echoing earlier comments from the government. More On this topic IN Europe The EU confirmed on Thursday night that Sberbank and four other Russian state-controlled lenders – VTB […]

Posted On : Published By : Tom Whipple