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Arctic Explorers Retreat From Hostile Waters With Oil Prices Low

When Statoil ASA (STL) acquired the last of three licenses off Greenland ’s west coast in January 2012, oil at more than $110 a barrel made exploring the iceberg-ridden waters an attractive proposition. Less than two years later, the price of oil had been cut by almost half and Norway’s Statoil, the world’s most active offshore Arctic explorer in 2014, relinquished its interest in all three licenses in December without drilling a single well, Knut Rostad, a spokesman for the state-controlled company, said by e-mail. Statoil’s decision shows how the plunge in oil, with Brent crude trading at about $45 a barrel, has dealt another blow to companies and governments hoping to tap the largely unexplored Arctic. That threatens to demote the importance of a region already challenged by high costs, environmental concerns, technological obstacles and, in the case of Russia , international sanctions. “At $50, it just doesn’t […]

Posted On : Published By : Tom Whipple
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Russia Facing Budget Cuts on Oil Price, Western Sanctions

By Andrey Ostroukh MOSCOW–Russia will have to cut budget spending this year as revenue declines due to Western sanctions and a fall in the price of oil, the country’s finance minister said Wednesday. Speaking at an annual economic conference, Anton Siluanov said that his ministry plans to cut budget costs by 10% across all sectors except for military spending. Russia is widely expected to slide into recession this year, while also suffering from double-digit inflation. The economic turbulence is the result of a rapid depreciation in the ruble, steered by sliding oil prices, massive capital flight and a geopolitical standoff with the West. Mr. Siluanov said that Russia has a $180 billion shortfall in revenues due to the drop in oil prices. A shortfall in revenues created by Western sanctions is expected to be between $40 billion and $60 billion, Mr. Siluanov added. The finance ministry will tap the […]

Posted On : Published By : Tom Whipple
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EU Explores Russia Sanctions Options, Better Ties

ENLARGE German Chancellor Angela Merkel, bottom left, Russia’s President Vladimir, Putin, left, French President François Hollande, third right, and Ukraine’s President Petro Poroshenko, right, during the 10th Asia-Europe Meeting in Milan last year. The European Union discussion paper suggests the EU consider gradually start normalizing many aspects of its ties with Moscow. Agence France-Presse/Getty Images BRUSSELS—The European Union could significantly scale back sanctions and resume discussions with Russia on issues ranging from visa-free travel; cooperation with the Moscow-led Eurasian Economic Union; and the crisis in Libya, Syria and Iraq; if Russian President Vladimir Putin moves to end the crisis in eastern Ukraine, according to an EU discussion paper. While insisting the EU can’t return to “business as usual” with Moscow, the paper suggests the EU consider gradually normalizing many aspects of its ties with Russia in what would be a significant shift in relations. It says the change would […]

Posted On : Published By : Tom Whipple
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Russian minister promises to limit government spending

MOSCOW (AP) — Russia’s finance minister has promised to maintain a tight lid on spending as the country faces its worst economic downturn in 15 years. Anton Siluanov said an earlier plan to boost government spending by nearly 12 percent this year is unrealistic, and some of the planned expenditures should be cut. He told an economic forum Wednesday that if oil prices average at $50 a barrel this year, government revenues will drop by around $45 billion compared to an earlier plan. The Russian ruble lost about half of its value last year under the combined blow of slumping global prices for oil and Western sanctions over Ukraine. The currency dropped about 1 percent in morning trading in Moscow, nearing 66 rubles per dollar. With oil trading at almost a six-year low, the World Bank on Wednesday sharply revised its predictions for Russia’s economy, foreseeing a 2.9 percent […]

Posted On : Published By : Tom Whipple
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Lack of aid deepens suffering in conflict-hit east Ukraine

AP Photo/Mstyslav Chernov World Video Buy AP Photo Reprints Latest News DONETSK, Ukraine (AP) — Valentina Dudareva’s voice cracks with despair as she stands in the snow, surveying the bombed-out windows of her apartment block in Donetsk, the separatist capital in eastern Ukraine. Cold, poor and hungry, Dudareva is among the masses of people trapped by fighting between the government and Russian-backed militias, reliant on outside help that often fails to arrive. More than six months have passed since Dudareva last received her pension – and the Russian food aid packages so trumpeted by rebel authorities are nowhere to be seen. Anger she once reserved for the Ukrainian armed forces shelling the city is now directed at the separatist government. "They tell us: `Go to the theater. There are tickets for sale!’" Dudareva said, dabbing a handkerchief to her cheek. "But I want to eat. I want my pension." […]

Posted On : Published By : Tom Whipple
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Hungarian Imports of Russian Diesel Fuel Via Ukraine Disrupted

BUDAPEST—Hungarian oil and gas company MOL Nyrt said on Tuesday that it has experienced disruptions in the supply of diesel fuel flowing through a pipeline from Russia via Ukraine. The company, which replied by email to questions posed by The Wall Street Journal, didn’t disclose the nature of the disruption. MOL said only that its “Russian partner fulfills its long-term contractual obligations.” Ownership of the diesel pipeline, however, has been in dispute between Ukraine and Moscow, as Kiev considers the Russian pipeline as Ukrainian property, a source close to the matter outside MOL said. MOL also imports crude oil from Russia via Ukraine, but the company said it hasn’t suffered disruptions so far and “hoped there won’t be any in the future.” MOL also said its refineries could be supplied with crude oil via an Adriatic pipeline, if necessary. Energy issues have been in the forefront in the bitter […]

Posted On : Published By : Tom Whipple
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Why Is There So Little Action on Climate Change?

According to the World Bank , human-induced or “ anthropogenic ” climate change may raise the earth’s temperature by two degrees in the next 20 or 30 years. Once four degrees is reached—which may arrive by the end of this century—the polar ice will be gone, sea levels will have risen dramatically and extreme climate disruption will be a fact. But climate scientists aren’t sure what will happen in the gap between these two scenarios. No-one knows where the point of no return is located, nor what the consequences will be of current climate changes for the human species and the planet. In effect, humanity is playing a game of Russian roulette. So what’s getting in the way of taking the necessary action? To find out some answers to this question, I hosted a discussion in November of 2014 between George Marshall , the co-founder of the Climate Outreach […]

Posted On : Published By : ASPO-USA
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Back to the Future? Oil Replays 1980s Bust

ENLARGE The discovery of oil from shale rocks means that U.S. output is faster paced. Drilling and hydraulically fracturing a well takes weeks, not years. Minneapolis Star Tribune/Zuma Press A surge of oil from outside of the Middle East flooded global energy markets. The world-wide thirst for crude didn’t keep up. The Organization of the Petroleum Exporting Countries stood by and watched as oil prices fell and then fell more. Welcome to the world of oil in 2015—a repeat in surprising ways of the story 30 years ago. Between November 1985 and March 1986, the price of crude plunged by 67%. Between June 2014 and today, crude prices have fallen by 57% and could well head lower. After the mid-1980s bust, it took nearly two decades for oil prices to rebound to pre-bust levels and remain there. Energy executives are now haunted by the question: Will it take as […]

Posted On : Published By : Tom Whipple
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Could Global Tide Be Starting To Turn Against Fossil Fuels?

Turning tide image via shutterstock. Reproduced at Resilience.org with permission. From an oil chill in the financial world to the recent U.S.-China agreement on climate change, recent developments are raising a question that might once have been considered unthinkable: Could this be the beginning of a long, steady decline for the oil and coal industries? Boom may be turning to bust for fossil fuels. Market forces are combining with the prospect of new limits on carbon emissions from major economies such as China and the United States to prick the carbon bubble. Many analysts are now suggesting that — with prices falling and production costs rising — the coming year could be the moment when investors realize the game is up for the coal and oil industries. Nations found it hard to make progress at UN climate negotiations in Lima last year, making many observers skeptical of the prospects […]

Posted On : Published By : Tom Whipple