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Petrobras Executives Quit Amid Scandal

BUENOS AIRES — The leadership of Petrobras, the Brazilian national oil giant grappling with a sprawling graft scandal, abruptly resigned on Wednesday amid accusations of a bribery scheme involving kickbacks to President Dilma Rousseff ’s governing Workers Party and its allies. The shake-up included the departure of Maria das Graças Foster, the chief executive handpicked in 2012 by Ms. Rousseff, after months of tumult at the state-controlled oil company. Skepticism had grown over Ms. Foster’s capacity to deal with the scandal at a time when low oil prices are also forcing the company to slash spending on costly projects. Ms. Rousseff had recently decided to replace Ms. Foster and other senior executives this month, according to news reports, fueling a surge in Petrobras shares. The newspaper O Globo reported on Wednesday that Ms. Foster insisted on resigning after meeting on Tuesday with the president in Brasília. Reflecting a low […]

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Weatherford International Laying Off 5,000 Employees in First Quarter

Weatherford International , one of the biggest oil-field service companies in the world, will lay off 5,000 employees during the first quarter as it tries to cope with a sharp downturn in energy prices. The company said late Wednesday that 85%, or 4,250 of the jobs lost, will come in the Western Hemisphere. The move is expected to save the company $350 million annually, Weatherford management said late Wednesday while announcing financial results for 2014. “We are ready to react swiftly to a dramatically changing landscape,” Chief Executive Bernard J. Duroc-Danner said. In addition, the company is offering voluntary buyouts to certain eligible employees to further reduce its head count. Weatherford’s extensive job cuts amount to 9% of its global workforce. Oil prices have plunged more than 50% since June, putting Weatherford and its peers on the ropes. Oil-field service companies help energy companies drill new oil and gas […]

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Chinese oil company cutting spending

Chinese oil company trims spending for 2015, but expects production to move forward. (UPI/Shutterstock/num_skyman) BEIJING, Feb. 4 (UPI) — China National Offshore Oil Corp. is working to control costs in its 2015 development plan in response to falling oil prices, its financial officer said. CNOOC said in its fourth quarter report it was cutting its capital expenditure budget by around 30 percent from last year to around $12 billion, with development expenses taking the biggest hit. "In response to challenges from falling oil prices, we will control our costs and strive for the effective implementation of our capital expenditure plan in order to improve the overall performance of the company," Chief Financial Officer Zhong Hua said in a statement Tuesday. The company in late 2014 put 33 blocks totaling 48,691 square miles on the auction block . CNOOC tried last year to reverse sagging production from mature fields. During […]

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Why Oil-Hungry China Isn’t Reaping Benefits From Low Prices

A smoking chimney is seen at a PetroChina oil factory in Dalian, Liaoning province January 20, 2015. Reuters China – which gets 60% of its oil from abroad — is on its way to becoming the world’s largest petroleum importer , and is already there by some measures . So in theory it stands to be a huge beneficiary of plummeting oil prices. However, as The Wall Street Journal reports, the benefits of cheap oil for several major economies are far less clear , as governments from Europe to Japan battle fears that falling prices—in part a result of cheap energy—will deter spending by consumers and new investment by companies. In China, cheap oil hasn’t been nearly the boon many may have thought. That is the result of several factors. Advertisement The government controls prices, meaning the drops for Chinese businesses and consumers lag those of international oil markets. […]

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Beijing’s public transit on the “smart” way

BEIJING, Feb. 5 (Xinhua) — Functions of Beijing’s public transportation card will soon be incorporated in a wearable device, as local authorities aim to adapt to the "smart" era. Working with a local technology company, the Beijing Municipal Transportation Card Co. Ltd, which issues the city’s transit cards, will allow the card functions to be incorporated in a wrist strap, which can be connected to mobile phones wirelessly. Passengers can charge their cards and inquire about their card balance via their mobile phones, saving them the time spent waiting in long queues at ticketing offices. In addition to public transit, the device’s paying function will extend to supermarkets, convenience stores, restaurants, vending machines and restaurants. The strap, which will be available following the Chinese Lunar New Year, will also help monitor the user’s health status, and provide suggestions based on the statistics it obtains. The strap will be priced […]

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S&P: Kern County, Calif., Outlook Negative After Fiscal Emergency

Feb 3 (Reuters) – Standard & Poor’s Ratings Services revised the outlook for Kern County, California, to negative, after the county declared a fiscal emergency last week, citing lower oil prices. The rating agency said it was concerned with a projected $27 million budget shortfall in fiscal 2016. By declaring a fiscal emergency, the county can access $40 million general fund reserve to cover the gap. The third largest county in California, with a total population of nearly 900,000, Kern’s pension obligations, already high, will "continue to rise for a number of years," said Standard & Poor’s credit analyst Li Yang. "The county is going to need to address that deficit going forward." Kern forecasts that its pension costs will increase through 2022 and has set aside portions of its reserves to account for the rising costs, said Yang. "That will translate into spending down reserves," he said. The […]

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Many Oil Firms Plan No North Dakota Layoffs Despite Cheap Oil

WILLISTON, N.D., Feb 4 (Reuters) – Halliburton, Statoil ASA, Hess Corp and other North Dakota energy companies have decided, for now, not to lay off staff in the No. 2 U.S. oil producing state, hoping to be prepared for any prolonged rebound in crude prices. Many oil producers and their contractors are trying to strike a balance between cutting costs and maintaining workforce reserves after a more-than 50 percent drop in oil prices since last June. The drop has made some oil patch investors anxious that North Dakota could experience a third oil bust after slumps in the 1950s and 1980s. Local business leaders, though, say they’re confident the state’s economy can abide the slowdown. Indeed, oil prices are nothing if not volatile, up about 19 percent in the past four trading days after plunging for months. Whiting Petroleum Corp, the largest North Dakota oil producer, has no plans […]

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Oil, gas infrastructure investments essential, House panel told

WASHINGTON, DC, Feb. 4 02/04/2015 Investments in oil and gas transportation and storage should move ahead because they are essential in continuing the US economic recovery and North American energy renaissance, witnesses told a US House Transportation and Infrastructure subcommittee. “There is a growing awareness that this is a unique American moment,” American Petroleum Institute Pres. Jack N. Gerard said during the Pipelines, Railroads and Hazardous Materials Subcommittee’s Feb. 3 hearing. “It is a moment that marks the transition from endemic energy dependence to energy security and global energy leadership—both of which have been public policy goals of every president and every Congress since the 1970s. Gerard’s testimony continued, “But to be clear, to secure this unique American moment will depend heavily on our ability to build the necessary infrastructure to achieve our nation’s full energy potential.” The unexpected collapse of crude oil prices has altered the outlook for […]

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The EIA’s Great Expectations

The EIA, in their INTERNATIONAL ENERGY OUTLOOK 2014  publishes what they call “World crude and lease condensate production by region and country, 2009-2040, (Table A5). Since I only track C+C, or Crude Only in the case of OPEC, I thought it would be interesting to see where they thought C+C production was headed in the next 25 years. An note about the charts below. The EIA data in this report only uses historical data for 2009 thru 2011. However I extended that historical data through 2014. The data for 2014 is the average C+C production January through September. Also note that the historical data is yearly but the projected data is in 5 year intervals, 2020 through 2040. All data is in thousand barrels per day. EIA Proj. World The EIA is expecting world C+C production to be over 99 million million barrels day in 2040, or about 22 […]

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California Rains on Gas Drillers

ENLARGE Rain is forecast for drought-stricken California this week. That will help fill the West’s hydropower reservoirs and weigh on natural-gas prices. Photo: Associated Press Shivering New Yorkers will no doubt be pleased to hear that San Francisco, after its driest January on record, is due a spot of rain this week. One group that won’t be happy: natural-gas producers. A year ago, the combination of a frozen New York and a parched Bay Area was a boon to struggling gas drillers. When the West’s hydropower reservoirs are depleted, the region burns more gas to keep the lights on. If Northeasterners are simultaneously firing up the heating (and their own power stations) to fend off the cold, this boosts gas demand. Throw in the bottlenecks created by kinks in the country’s pipeline network, and you end up with regional price spikes. On some days in January 2014, gas delivered […]

Posted On : Published By : Tom Whipple