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The $12 Billion Reason BP Isn’t Worried About a Hostile Takeover

Oil giant BP Plc, which was said to be readying defenses for potential takeover offers, has a little-known ace in the hole: a disclaimer in its Macondo spill settlement that could tack $12.6 billion onto the price tag. A potential buyer might be forced to accelerate the payment of up to two thirds of the $18.7 billion in penalties the company agreed to pay the U.S. and several states, according to company filings. As it stands, BP has more than 15 years. An option that gives the federal government and some states the ability to demand faster payment in a takeover effectively hands them a veto power over any deal. Together with the company’s exposure to Russia amid sanctions and the worst oil crash in decades, it amounts to a powerful deterrent to suitors, said William Arnold, a former banker and executive at Royal Dutch Shell Plc. “This would […]

Posted On : Published By : Tom Whipple
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Volkswagen CEO Promises Action on Emissions Scandal in Letter

He has promised investors and customers a thorough investigation into the emissions cheating scandal that has rocked Europe’s biggest car maker. And in a letter to employees, which was viewed by The Wall Street Journal, Mr. Müller closed ranks with labor representatives, vowing to ensure that such misconduct “never happens again.” “We will be relentless in getting to the bottom of this—fast, open and as decisively as possible,” Mr. Müller and Bernd Osterloh, head of VW’s powerful works council, said in the letter, which is to be sent to employees on Monday. The letter echoes comments Mr. Müller made during his first public appearance after being named CEO of the group on Friday. By sending it together with Mr. Osterloh, the new VW chief is demonstrating his willingness to work closely with labor, a key reason why he was chosen for the job. On Friday, Mr. Müller acknowledged the […]

Posted On : Published By : Tom Whipple
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Limited Progress Seen Even as More Nations Step Up on Climate

Photo An area of the Amazon rain forest burned to make way for pasturelands. Brazil has pledged to end illegal deforestation. Credit Lalo de Almeida for The New York Times The pledges that countries are making to battle climate change would still allow the world to heat up by more than 6 degrees Fahrenheit, a new analysis shows, a level that scientists say is likely to produce catastrophes ranging from food shortages to widespread extinctions of plant and animal life. Yet, in the world of global climate politics, that counts as progress. The new figures will be released Monday in New York as a week of events related to climate change comes to an end. The highlight was an urgent moral appeal at the United Nations on Friday from Pope Francis, urging countries to reach “fundamental and effective agreements” when they meet in Paris in December to try to […]

Posted On : Published By : Tom Whipple
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Britain must prepare for life without oil

The man tasked with saving the UK’s North Sea oil industry says it will take two years or more to recover from its problems and that Britain should start preparing for life without oil. Last year Sir Ian Wood wrote a report, commissioned by the government , into how to maximise the North Sea’s oil and gas, which has been a big driver of the economy since the 1970s but has been in long-term decline since the late 1990s. In an interview with the Financial Times, Sir Ian Wood warned: “Oil at $35 to $55 [per barrel] is the likely scenario into 2017, and I think the best guess right now for a recovery in the North Sea is 2017-18.” The North Sea today produces about 1.5m barrels of oil per day, compared with 4.5m at its peak. Its problems have increased significantly over the past year, however, as […]

Posted On : Published By : Tom Whipple
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Population growth is part of migrant crisis

“It is clear that the greatest tide of refugees and migrants is yet to come. Therefore we need to correct the policy of open doors and windows.” So said Donald Tusk at the EU summit meeting on Wednesday. As president of the European Council he had just returned from a visit to the Syrian frontline states of Turkey , Jordan and Lebanon , so is well informed on the condition of the four million refugees there. Population pressures are now push and pull factors in the European refugee crisis. They are plainly there in the surge of Syrian refugees from Turkey through Greece this summer. In the camps on Syria’s border people have given up hope of peace returning, going home or finding employment in Turkey itself. Led by younger men they are responding to signals from northern Europe that they could have a better life there – alongside […]

Posted On : Published By : Tom Whipple
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Oil Prices Rise as U.S. Drilling Drops

Oil pumps work at sunset in the desert oil fields of Sakhir, Bahrain. NEW YORK—Oil prices strengthened Friday as drilling in the U.S. declined and positive economic data boosted demand expectations. Prices have traded in a tight range this month amid uncertainty about how quickly the global glut of crude is set to shrink. Production is falling in the U.S., leading to lower commercial inventories of crude oil, but output remains robust in other countries. While global consumption has been strong, analysts question whether demand can continue to grow at a high pace next year. Light, sweet crude for November delivery settled up 79 cents, or 1.8%, at $45.70 a barrel on the New York Mercantile Exchange. Prices rose 1.5% on the week. Brent, the global benchmark, 43 90 cents, or 0.9%, to $48.60 a barrel on ICE Futures Europe, posting a 2.4% weekly gain. The number of rigs […]

Posted On : Published By : Tom Whipple
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Oil prices stable as firm Chinese seasonal demand offsets weak Japan data

A petro-industrial factory is reflected in a traffic mirror in Kawasaki near Tokyo December 18, 2014. Oil markets remained subdued in early trading in Asia on Friday after weak data from Japan reinforced concerns over global economic growth, while strong seasonal demand from China helped support prices in the short-term. Japan’s core consumer prices fell 0.1 percent in August from a year earlier, government data showed on Friday, marking the first year-on-year drop since April 2013. The index includes oil products but excludes fresh food prices. HSBC said that markets had focused too much on China’s slowdown, warning that many developed economies were faltering. "It turns out that developed market imports haven’t been anywhere near as robust as relatively upbeat local demand data would suggest … For all their recent swagger, developed markets are hardly firing on all cylinders. So, don’t just blame China," the bank said on Friday. […]

Posted On : Published By : Tom Whipple
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OPPENHEIMER: Goldman was wrong about $200 oil, and it’ll also be wrong about $20 oil

Oppenheimer issued a note Thursday arguing that oil is looking for a "new normal" price around $65 to $75 a barrel. But on the way to making its point, the firm also took a shot at Goldman Sachs’ history of getting calls on the price of oil wrong. On Thursday, Oppenheimer wrote (emphasis ours): We dismiss the $20 oil scenario, as we dismissed the $200 oil view in 2008 — both came from the same source. We think oil prices will remain lower for longer, until the objectives behind the collapse are met, and we don’t see this happening any time soon. We think the market is still searching for the new normal, which is not $50 and is not $100 either, but more likely in the $65-$75 range. That "same source" is Goldman Sachs. Earlier this month, oil analysts at Goldman Sachs said that in a worst-case scenario, […]

Posted On : Published By : ASPO-USA
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Theft disrupts Kurdish oil flows to Turkey

Kurdish government chronic sabotage against crude oil problems robbing it of revenue needed to fund security operations. Photo by Mohammed al Jumaily/UPI ERBIL, Iraq, Sept. 25 (UPI) — The Kurdish government in northern Iraq said the flow of crude oil to a Turkish sea port was halted because of theft at the start of a Muslim holy day. On Thursday, Muslims honored the holy day of Eid al-Adha . The semiautonomous Kurdistan Regional Government said saboteurs targeted a crude oil pipeline running north to the Turkish sea port at Ceyhan. No repair crews were on duty because of the holy day. Crews are expected at the site Friday, though no estimate of a return to service is available, the government said. The Kurdish government credits crude oil exports through Turkey as a necessary economic lifeline. "Revenue from crude oil export through the pipeline to Ceyhan represents the Kurdistan Region’s […]

Posted On : Published By : Tom Whipple
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Asia taking climate initiative

Asian Development Bank announces planned increase in climate spending ahead of key pledges from the U.S. and Chinese leaders. File photo by Stephen Shaver/UPI MANILA, Sept. 25 (UPI) — By 2020, the amount of funding to support the fight against climate change will double to $6 billion, the president of the Asian Development Bank said. World leaders gathering in New York this weekend are expected to announce commitments to more than a dozen sustainable development goals. With China, a world emissions leader, planning to lead the announcements, ADB President Takehiko Nakao said the growing Asian economies have a major role to play in the fight against climate change. "Nowhere is tackling climate change more critical than in Asia and the Pacific, where rising sea levels, melting glaciers, and weather extremes like floods and droughts are damaging livelihoods and taking far too many lives," he said in a statement. Nakao […]

Posted On : Published By : Tom Whipple