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In Hunt for Missing Billions, Buhari Targets Nigeria Oil Company

Nigerian President Muhammadu Buhari. Photographer: Brendan Smialowski/AFP/Getty Images As oil minister during military rule in the 1970s, Muhammadu Buhari oversaw the birth of the Nigerian National Petroleum Corp. Now, as democratically elected president, he intends to break up the opaque bureaucracy, which manages the oil assets of Africa’s biggest crude producer, to ensure taxpayers get their fair share. History isn’t on his side. “No Nigerian leader, including Buhari himself from the 1980s, has managed to sanitize the oil sector,” said Philippe de Pontet, head of the Africa practice at the Eurasia Group in New York. “Buhari’s challenge is not only to depoliticize NNPC but to disentangle its vested interests and its rogue commercial operations, which won’t be easy.” For all its importance to Nigeria, the NNPC is largely inscrutable Buhari made cleaning up the 24,000-employee colossus — the largest government-owned company — a key plank in the election campaign […]

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Venezuela farmers ordered to turn over their food to the government

As Venezuela’s economy continues to worsen — its currency having entered “free fall mode,” according to the Financial Times — the desperate Maduro government has taken the extreme measure of nationalizing the nation’s food industry. Venezuelan farmers and food producers are now required to sell anywhere from 30 percent to 100 percent of their products to state-owned stores. The order covers staple foods such as rice, milk, oil, sugar and flour. Shortages and long lines in stores have become common since Venezuela’s economy began sliding into inflation — a situation that placed them at the top of the list in the world for inflation in 2014. The official inflation rate was 65 percent last year, and in the last month the currency has lost another 43 percent of its value. Oil prices once again have dropped, causing further strain on Venezuela’s struggling economy. The recent free fall of the […]

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China under mounting pressure to ease policy as economy stumbles

A woman chooses vegetables at a supermarket in Beijing, China, July 9, 2015. China is under growing pressure to further stimulate its economy after disappointing data over the weekend showed another heavy fall in factory-gate prices and a surprise slump in exports. Producer prices in July hit their lowest point since late 2009, during the aftermath of the global financial crisis, and have been sliding continuously for more than three years. Exports tumbled 8.3 percent in the same month, their biggest fall in four months, as weaker global demand for Chinese goods and a strong yuan policy hurt manufacturers. "Policy focus is definitely the (producer) deflation at this stage," said Zhou Hao, economist at Commerzbank AG in Singapore. He said China’s central bank would likely need to further cut interest rates again, having already cut four times since November in the most aggressive easing in nearly seven years. The […]

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Once Burned, Twice Shy? Utica Shale Touted to Investors As Shale Drillers Continue Posting Losses

For the past several weeks, the drilling industry — hammered by bad financial results — has begun promoting its next big thing: the Utica shale, generating the sort of headlines you might have seen five years ago, when the shale drilling rush was gaining speed. “ Utica Shale Holds 20 Times More Gas Than Previous Estimates ”, read one headline. “ Utica Bigger Than Marcellus ”, proclaimed another. The reason for the excitement was a study, published by West Virginia University, that concluded the Utica contains more shale gas than many estimates for the Marcellus shale, a staggering 782 trillion cubic feet. “This is a landmark study that demonstrates the vast potential of the Utica as a resource to complement – and go beyond – what the Marcellus has already proven to be,” Brian Anderson, director of West Virginia University’s Energy Institute, told the Associated Press. But those considering […]

Posted On : Published By : Tom Whipple
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Move to Allow U.S. Oil Exports Accelerates

Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports. The U.S. has long pushed for liberalized trade, with U.S.-produced crude being the biggest exception since the shock of the 1973 Arab oil embargo led Congress to ban oil exports under nearly all circumstances. The only other U.S. products banned under the same regulations are a type of tree found in Western North Americacalled Western red cedar and live horses for slaughter shipped by sea. The House now looks likely to vote as early as September to lift the oil-export ban, with Senate action anticipated early next year, which would mark a milestone few saw coming. But while freely exporting U.S. oil may come as a shock to some Americans, it probably won’t cause much of an economic stir, especially with global […]

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Pipeline overbuild forces company executives to seek new opportunities

A doubling of pipeline capacity in one of the most prolific U.S. shale plays may have gone overboard in its rush to move oil to market, top pipeline company executives said during earnings announcements over the past week. With more than 1 million barrels per day of additional pipeline capacity moving oil from the Permian Basin of West Texas added since early 2014, companies dependent on new projects to drive revenue growth are now faced with a limit. The buildout has also caused some temporary inbalances in spot prices, traders say, as pipelines flood Houston-area refiners with surplus crude. The race for new and bigger pipelines to ease bottlenecks has led to a slew of new projects coming online through 2017, even as output wanes with oil prices down nearly 60 percent from a year ago on a global supply glut. Plains All American Pipeline, one of the biggest […]

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Industry, States Set to Fight EPA Greenhouse Gas Rules

Power plants face new greenhouse gas regulations from the EPA. WASHINGTON—Industry representatives and a group of state attorneys general are preparing to file lawsuits soon to challenge Obama administration rules requiring significant cuts in power-plant carbon emissions. The move, expected in the coming weeks, would open up a legal battle by contesting the authority of the Environmental Protection Agency on a wide range of grounds, some of them little explored by the courts. The EPA issued the regulations last week under a seldom-used section of the Clean Air Act. The agency also is confronting a legislative oddity from 1990, when Congress updated the clean-air law but inadvertently enacted differently worded House and Senate amendments that are relevant to the EPA’s carbon rules. How courts interpret the amendments could determine whether the administration’s power-plant rules survive. Additional legal challenges will focus on whether the agency exceeded its powers by pushing […]

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U.S. Pump Prices Slip to Three-Month Low in Lundberg Survey

Retail gasoline prices tumbled to the lowest level in more than three months in the Lundberg Survey as crude oil dropped for a sixth straight week. U.S. drivers paid an average $2.7108 a gallon for regular gasoline at pumps across the nation in the two weeks ended Aug. 7, according to Lundberg Survey Inc. Prices fell 10.77 cents a gallon in the survey, which is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. Gasoline cost about 81 cents a gallon less than a year ago. Pump prices declined to the lowest level since an April 24 survey due to lower crude oil prices in combination with high output from refineries, according to Trilby Lundberg, the president of Lundberg Survey. U.S. refineries ran at 96.1 percent of capacity in the week ended July 31, the highest rate since August 2005. In the next survey […]

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Gazprom Profit Jumps on Weaker Ruble Even as Gas Sales Drop

Gazprom PJSC, the world’s biggest natural gas producer, said first-quarter profit rose 71 percent, beating analyst estimates, as a weaker ruble countered lower fuel prices and falling volumes. Net income climbed to 382 billion rubles ($5.9 billion) from 223 billion rubles a year earlier, the Moscow-based company said Monday in a statement. That exceeded the average 353 billion-ruble estimate from eight analysts, according to data compiled by Bloomberg. Revenue rose 5.7 percent to 1.65 trillion rubles. Profit at Gazprom, Russia’s biggest company by market value, rose even as oil’s slump weighed on export prices for its gas, which are linked to crude under most contracts. The company’s average June export price was the lowest since 2007, according to Bloomberg calculations based on Russian customs data. Gazprom may cut its production to a record this year as demand slows in Russia and Ukraine, the government said in July. While gas […]

Posted On : Published By : Tom Whipple