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Special Report: Anatomy of Nigeria’s $20 billion ‘leak’

ABUJA, Nigeria (Reuters) – In late 2013, Nigeria’s then central bank governor Lamido Sanusi wrote to President Goodluck Jonathan claiming that the state oil company had failed to remit tens of billions of oil revenues it owed the state. After the letter was leaked to Reuters and a local news site, Jonathan publicly dismissed the claim and replaced Sanusi, saying the banker had mismanaged the central bank’s budget. A Senate committee later found Sanusi’s account lacked substance. Sanusi has since become Emir of Kano, the country’s second highest Islamic authority, and has smoothed over relations with the president. He declined to discuss his earlier assertions. Before he was sacked, though, the central banker submitted to Nigeria’s parliament more than 300 pages of documentation in support of his claim. Reuters has reviewed that dossier, which offers one of the most comprehensive studies of waste, mismanagement and what Sanusi called “leakages” of cash in Nigeria’s oil industry. Detailed here, […]

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Angola Must Raise Taxes, Cut Fuel Subsidy as Oil Falls, IMF Says

(Bloomberg) — Angola should raise taxes and eliminate fuel subsidies to help offset plummeting revenue as oil prices plunge, the International Monetary Fund said. “First, get taxes up,” Nicholas Staines, the IMF’s resident representative in Angola, said in a presentation in Luanda, the capital, on Thursday. “I absolutely love taxes. It’s how a state runs. Without taxes, no state.” Oil prices have slumped by more than half since June, cutting revenue in Angola, where crude accounts for almost all of exports and more than two thirds of government income. Authorities have slashed the oil price estimate in the 2015 budget to $40 a barrel from $81 a barrel and are due to publish a revised spending plan next month. Budget revenue will probably drop by $17 billion and oil exports fall by $27 billion based on a $45 a barrel oil price and 2014 average production of 1.66 million […]

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Cheap Oil Continues to Hammer U.S. Oil Rigs

U.S. oil rigs continued to get crushed this week despite record levels of production. Drillers idled 83 rigs, following a decline of 94 rigs in the prior week, Baker Hughes reported Friday. The total U.S. rig count is down 25 percent since October, an unprecedented four-month retreat.  The collapse in oil prices is wiping out more than 30,000 oil jobs, according to a tally of announced layoffs by Bloomberg News. Cowen & Co. estimates that spending on exploration and production are declining more than $116 billion, a 17 percent decline. The oil crash hasn’t yet shown up in U.S. jobs numbers , and American oil production is at the highest level for this time of year since at least 1983. Still, there’s mounting anecdotal evidence of an industry in distress, and the rig counts appear to be in free fall. 

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US Production to Grow At Slower Pace in 2015

US oil production will continue to grow in 2015, but at a slower pace, according to recent analysis by Deloitte. U.S. oil production will continue to increase this year, albeit at a slower pace, due to companies continued investment in projects underway, according to recent analysis by Deloitte MarketPoint. For the past two years, U.S. tight oil production has grown at an annual rate of 1 million barrels of oil per day (MMbopd).   “While the recent drop in crude prices has squeezed the CAPEX budgets of shale producers , some reportedly have been able to lower their operating costs to below $40/bbl through efficiency gains and better economics in the ‘sweet spots’ of the shale plays,” recent Deloitte paper “Oil Prices in Crisis – Considerations and Implications for the Oil and Gas Industry”. Many analysts expected declines of between 300 and 500,000 barrels of oil per day (bopd) […]

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Low Oil Prices Have Yet To Rattle North Dakota Small Businesses

Small business owners in North Dakota, the United States’ second-largest oil-producing state, remain confident despite plunging crude oil prices. WILLISTON, N.D., Feb 6 (Reuters) – Even as plunging crude oil prices fuel anxiety in North Dakota, small business owners in the No. 2 U.S. oil producing state say they are confident that demand for their products and services will remain strong enough to keep things humming. North Dakota’s oil patch has been one of the faster-growing U.S. regions. Small businesses employ three-fifths of the state’s private workforce, about 195,000 people, with food service and construction among the larger employers, according to data from the U.S. Small Business Administration (SBA). While big oil companies grab the most headlines out of the state, much of the local economy still relies on hotel owners, plumbers, contractors and other small businesses, said Mike Gallagher, manager of the SBA’s North Dakota district. "There’s a […]

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Union strike ongoing at US refineries as negotiations continue

HOUSTON, Feb. 6 02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue to negotiate collective bargaining agreements over pay, benefits, and health and safety standards with oil companies ( OGJ Online, Feb. 2, 2015 ). While discussions between USW and the industry ended without resolution on Feb. 5, both the union and Royal Dutch Shell PLC , which serves as lead company for National Oil Bargaining (NOB) negotiations, have agreed to resume talks, Shell said in a Feb. 5 statement. The company did not disclose a specific timeframe for when discussions between the parties would restart. In the meantime, USW has announced that it will sponsor a National Day of Action (NDA) on Feb. 7 for fair contracts and safe jobs throughout the oil industry, with plant gate rallies scheduled at 65 refineries and […]

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US jobs growth beats expectations

The US labour market recovery gathered momentum in January as employers added more jobs than expected and wages rebounded, raising the odds of an interest-rate hike in the middle of the year. The dollar jumped against the euro after official figures showed US employers added more than a million jobs in the past three months alone, the most since 1997. More On this story On this topic IN US Economy The data were coupled with improved earnings figures that reversed surprisingly weak wage numbers for December. “The US economy is looking better and better,” said Torsten Sløk, chief international economist at Deutsche Bank. US Treasury Secretary Jack Lew told Congress this week that the American economy was in a “self-sustaining” recovery. The latest figures support that verdict, and sharpen the contrast between the robust US recovery and gloomier prospects in many economies overseas. The US has now seen eleven […]

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U.S. Rig Count Falls by 83 in Latest Week

By Angela Chen U.S. oil-rig count fell by 83 to 1140 in the latest week, according to Baker Hughes Inc. Oil prices spiked last week after Baker Hughes reported that U.S. oil rig count dropped to a two-year low of 1,223. Market participants say oil prices, which have fallen more than 50% in the past seven months, could be bottoming out as producers react to the low prices by cutting expenditure and reducing drilling activity. March oil futures are up 4% to $52.50 a barrel. Gas rigs were down four to 314 this week. The U.S. offshore rig count is at 50, up one from last year and down four from the same period in the year-earlier period. For all rigs, including natural gas, the week’s drop was 87 to 1456. Compared to a year ago, this week’s down is down 315 from 1771. Write to Angela Chen at […]

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Alberta Plans to Lean on Consumers to Weather Oil Slump

(Bloomberg) — Alberta, Canada’s third-largest provincial economy, will lean on consumers to help offset a drop in oil royalties that has led to the “evaporation” of 17 percent of revenue, Premier Jim Prentice said. Albertans should expect increases to user fees and personal taxes over three budget cycles to help pay for the most expensive public services in the country, Prentice said in an interview at Bloomberg’s headquarters in New York. Imposing higher taxes on companies would increase the burden of confronting a slowing economy, he said. “I don’t think the right course of action right now is to increase corporate taxes or royalties,” Prentice said. “It’s the wrong time to start taxing investment and wealth. I won’t be part of it.” Sworn in September as the price of oil was in the midst of a collapse, Prentice is now tasked with reducing Alberta’s dependence on petroleum revenue while […]

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Light for British shale gas work turning green

British government extends exploration permits for shale gas to Cuadrilla Resources. Photo by photostock77/Shutterstock LONDON, Feb. 6 (UPI) — With federal permits in hand, British shale gas pioneer Cuadrilla Resources said Friday it was committed to a light environmental permit despite public uproar. The British Environment Agency gave the company permits to carry out shale gas exploration at its Roseacre Wood site in Lanchashire. "Following such a rigorous review and public consultation of all of our permit applications by the regulator, this unequivocally demonstrates that, as we have committed, our proposed exploratory operations will be carried out responsibly ensuring the local environment is protected," Cuadrilla Chief Executive Officer Francis Egan said in a statement. The British government said the permits granted to the company spell out ways in which it needs to protect regional groundwater and surface water supplies, ensure air quality is within safe limits and dispose, store […]

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