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Oil industry slipping into the red as outlook dims

The Shell Oil Company’s drilling rig Polar Pioneer is shown in Port Angeles, Washington May 12, 2015. The oil sector is slipping into the red after years of fat profits as the steep slump in oil prices shows little sign of ending, with this quarter shaping up to be the worst since the downturn started. The world’s top oil companies have struggled to cope with the halving of oil prices since June 2014. They have cut spending repeatedly, made thousands of job cuts and scrapped projects. The lower-for-longer outlook for oil prices took its heaviest toll yet in the third quarter as oil companies again reported a dramatic drop in income. Some saw results swing into the loss column, and the industry had billions of dollars in impairment charges. "This downcycle poses significant challenges," Jeff Sheets, ConocoPhillips’ ( COP.N ) chief financial officer, told investors on a conference call […]

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Petronas faces conflict over foreign workers

Then-Iraqi Prime Minister Nouri al-Maliki (center) attends a ceremony to celebrate the start-up of the Garraf oil field in Dhi Qar province on Sept. 21, 2013. (STAFF/Iraq Oil Report) Malaysian oil firm Petronas will file a complaint directly to the oil minister against its Iraqi partners for restricting visas to foreign personnel. A senior South Oil Company (SOC) official involved in the visa process said both SOC and its Dhi Qar province directorate has authorized an effort to replace foreign staff with Iraqis, part of a larger trend to provide more local jobs. "We are currently replacing the engineers, technicians and workers from the Malaysian team in Garraf field… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple
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Iranian-American Executive Arrested in Iran

Iranian security forces have arrested an Iranian-American businessman who had promoted improved ties between the two countries, adding to signs that hard-liners in Tehran are trying to block foreign investors from entering the Islamic Republic in the wake of the historic nuclear deal. In the past few weeks, Iranian businessmen with links to foreign companies have been detained, interrogated and warned against wading into economic monopolies controlled by the Revolutionary Guard Corps, according to several businessmen interviewed inside and outside of Iran. Siamak Namazi in an undated photo from his Linkedin profile. About two weeks ago, Siamak Namazi, the head of strategic planning at Crescent Petroleum Co., was arrested as he was visiting relatives in Tehran from his home base in Dubai, according to people briefed on the situation. He was arrested, they said, by the Guard’s intelligence arm, which reports to Supreme Leader Ayatollah Ali Khamenei, not the […]

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Petrochemical implications of easing sanctions on Iran

Earlier this month, the US and its negotiating partners announced steps to move ahead on what is known as “adoption day,” intended to show readiness for sanctions relief for Iran. However, relief will only begin on “implementation day,” the day when the International Atomic Energy Agency certifies that Iran lived up to its commitments according to the nuclear deal completed in July. According to the US CIA’s The World Factbook , Iran has the world’s second largest supply of conventional natural gas reserves, much of which is rich in ethane. Given that the rest of the Middle Eastern countries are experiencing limited supplies in ethane, this presents a huge opportunity for the Iranian petrochemical sector as sanctions are eased. Investing in Iran includes enormous political risks, but there are major advantages for international petrochemical investors, including low-cost steam cracker feedstocks and access to the European and Asian markets. The […]

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Africa’s Biggest Economy Defying Currency Critics Chokes Growth

Nigeria’s economy is growing at the slowest pace this decade as oil prices drop. Companies are complaining they can’t get the dollars they need to do business. And trading in the naira has long since dried up. There are many good reasons why Godwin Emefiele, who runs the central bank of Africa’s biggest economy, should lift currency controls and let the naira depreciate. One of the things holding him back is politics. Devaluing the naira may give opposition parties the opportunity to claim that Emefiele’s main supporter, President Muhammadu Buhari, has lost control of the economy. With his backing, the policy chief will be able to resist his critics into 2016 before the worsening economic slump eventually forces him to capitulate, according to Standard Chartered Plc and Bank of America Corp. “They could probably hold out for at least six months, maybe even a year,” said Ayodele Salami, chief […]

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Angola: Why Luanda’s Residents Are Asking – Where Did All the Oil Riches Go?

A few years ago, Luanda, the capital of Angola, was on every ambitious investor’s lips . With large infrastructure and housing projects rapidly changing its appearance, the city seemed to be leaving behind the country’s 27-year civil war. But hopes for renewal are slowly dissipating as the price of the commodity on which Angola’s future was being constructed – oil – steadily declines. Angola is Africa’s second-largest oil producer. It is one of the countries that have been hardest hit by the fall in oil prices. The oil crash forced Angola to slash its 2015 budget by US$17 billion (a 25% reduction ). Construction companies are having difficulties paying their workers, and the Angolan central bank has devalued the currency , the kwanza. Construction threatens to screech to a halt. The fantasy built on oil is crumbling, showing that its benefits were barely felt outside privileged sites of elite […]

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Venezuela is running out of cash

China ends one-child policy Venezuela is running out of money fast and has started selling its gold. The cash-strapped country could default by next year when lots of debt payments are due. Venezuela’s reserves, which are mostly made up of gold, have fallen sharply this year as the country needs cash to pay off debt and tries to maintain its social welfare programs. Venezuela owes about $15.8 billion in debt payments between now and the end of 2016. But it doesn’t have enough to make good on its payments. Venezuela only has $15.2 billion in foreign reserves — the lowest amount since 2003. A lot of those reserves are in gold. Less than $1 billion of Venezuela’s reserves are in cash, and it has a couple billion in reserves at the IMF. Its government won’t say how much gold it currently has. In May, Venezuela had $11.7 billion — […]

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China has created a steel monster and now must tame it: Andy Home

The sun sets behind the SSI UK steelworks in Redcar, Britain September 28, 2015. The British steel industry is in crisis. That statement may come as a surprise to non-UK readers, many of whom might well be forgiven for thinking the country’s steel mills had gone the way of other legacy industries such as coal mining and shipbuilding. But Britain produced 12.1 million tonnes of crude steel last year, making the country the fifth-largest producer in the European Union. It won’t produce that much this year. The last couple of months have brought a string of closure announcements, including that of the Redcar plant in Teeside, a symbol of previous against-the-odds survival. British steel mills are struggling with UK-specific problems, particularly high energy costs that are significantly above the European average. Stung into belated action, the government is scrambling to assemble a rescue plan, albeit with one hand tied […]

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China’s Oil Giants Lose Almost All Profits Amid Crude Crash

The plunge in crude prices all but killed profits at China’s top energy producer and its largest oil refiner. PetroChina Co. on Thursday reported its worst quarterly profit on record, with net income for the three months ended September plunging 81 percent from a year ago to 5.2 billion yuan ($818 million). An increase in refining revenue failed to stanch a 92 percent drop in earnings at China Petroleum & Chemical Corp. Net income at Asia’s biggest refiner, known as Sinopec, was 1.64 billion yuan. Both posted less than half what analysts expected. “Falling oil prices really put those companies under tremendous pressure,” Neil Beveridge, an analyst at Sanford C. Bernstein & Co., said by phone from Hong Kong. “Moving forward, they have to continue to find ways to cut costs and improve efficiency and make themselves more competitive.” Damage from dropping oil prices has been almost inescapable for […]

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ConocoPhillips Reports Biggest Loss Since 2008 on Oil Crash

ConocoPhillips reported its widest quarterly loss in more than six years as a crash in oil and natural gas prices tempered growth from Texas to Canada. The largest major U.S. oil company without refining operations said it further reduced 2015 spending by $800 million for an anticipated total of $10.2 billion. ConocoPhillips lost $1.07 billion, or 87 cents a share in the third quarter, compared with a gain of $2.17 a share a year earlier, the Houston-based company said in a statement Thursday. It was the biggest loss since the fourth quarter of 2008. The loss mirrored those of other major oil companies, including Royal Dutch Shell Plc, which reported a third-quarter net loss of $7.42 billion Thursday, the most in more than a decade. Exxon Mobil Corp. and Chevron Corp. report earnings Friday. Chairman and Chief Executive Officer Ryan Lance has said ConocoPhillips will continue to support its […]

Posted On : Published By : Tom Whipple