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Brazil Drought Jolts Commodities' Prices

Brazil’s worst drought in decades is decimating crops but breathing new life into battered commodity markets. It hardly has rained in some of the South American country’s top farming regions since the start of the year, a period when precipitation is usually the heaviest. Traders, analysts and government forecasters who were calling for record harvests in coffee, sugar and soybeans as recently as December are cutting production estimates, triggering a spike in futures prices that may translate into higher costs for consumers later in the year. Futures prices for the arabica coffee variety are up 67% since the start of the year. Raw-sugar prices have risen 8%. Soybeans, which have been affected by drought in some areas and too much rain in others, also are up 8%. The withered coffee trees and parched sugar-cane fields stand in contrast to the bumper crops that have weighed on commodities […]

Posted On : Published By : Tom Whipple
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142 Cities In Brazil Are Now Rationing Water As Drought Goes Critical

Did you know that the drought in Brazil is so bad that some neighborhoods are only being allowed to get water once every three days?  At this point, 142 Brazilian cities are rationing water and there does not appear to be much hope that this crippling drought is going to end any time soon.  Unfortunately, most Americans seem to be absolutely clueless about all of this. In response to the recent article about how the unprecedented drought that is plaguing California right now could affect our food supply, one individual left a comment stating “if Califirnia can’t supply South America will. We got NAFTA.”  Apart from the fact that this person could not even spell “California” correctly, we also see a complete ignorance of what is going on in the rest of the planet.  The truth is that the largest country in South […]

Posted On : Published By : Tom Whipple
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Shell sells stake in Brazilian field for $1bn

Royal Dutch Shell said on Wednesday it had agreed to sell a stake in one of its Brazilian offshore assets to Qatar’s state-owned oil and gas company for $1bn. The disposal of a 23 per cent share in Parque das Conchas project, also dubbed BC-10, to Qatari Petroleum International comes with the Anglo-Dutch major expected to step up efforts to raise cash in 2014 and 2015. Shell, Europe’s largest oil company by market value, has been accused by investors of spending too much in recent years and Ben van Beurden, new chief executive, who took the reins at the start of this year, is under pressure to improve capital discipline. As part of that, Shell is expected to sell some $15bn worth of assets over the next two years in one of the largest disposal programmes in its history. Already this year it has announced the sale of a […]

Posted On : Published By : Tom Whipple
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Shell Sells Stake in Offshore Brazil Oilfield for $1 Billion

Royal Dutch Shell Plc (RDSA) sold part of its stake in an offshore Brazil oilfield as Europe’s largest oil company steps up disposals to offset capital spending. Shell agreed to sell a 23 percent stake in the Parque das Conchas field, or BC-10, to Qatar Petroleum International Ltd. for about $1 billion, it said in a statement today. The Hague-based company will retain a 50 percent stake and will continue to operate the field, it said. Shell is selling assets to bring down its net capital investment, or spending on projects adjusted for acquisitions and disposals, which climbed to a record $45 billion last year. Shell issued its first profit warning in a decade this month, saying fourth-quarter earnings will be about half those of a year earlier as the cost of projects rises. The BC-10 field is currently producing about 50,000 barrels of oil equivalent a day. The […]

Posted On : Published By : Tom Whipple
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Brazil’s big oil dreams begin to sour

“It’s funny, a few years ago, everybody loved Brazil,” said Roger Tissot, a veteran consultant on Latin America energy. “And now it seems the love is gone.” Brazil once saw itself as an up-and-coming oil power that would help meet the world’s demand, but it now faces a hard reality and might have to scale back its pretensions, former energy officials, oil executives and advisers say. The country’s deep-sea bonanza has suddenly become less alluring to big, rich oil companies that had been excited about Brazil. Other promising prospects around the world have emerged instead, from fields in Africa to the shale deposits unlocked by hydraulic fracking in the United States to the tar sands of Canada. “These companies have the financial muscle and engineering capacity and technologies to move around the world,” said Ramon Espinasa, an oil specialist at the Inter-American Development Bank in Washington. “They are able […]

Posted On : Published By : Tom Whipple
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Petrobras declares commercial potential of two offshore fields

Brazil’s Petrobras energy company said it sent notices to the Brazilian government advising that two offshore oil and gas prospects have commercial potential. Petrobas, formally known as Petroleo Brasileiro, said Thursday it submitted declarations of the commercial potential of the Franco and Sul de Tupi prospects in the energy-rich Santos Basin to the National Petroleum, Natural Gas and Biofuels Agency. Petrobas estimated the Franco prospect, which it wants to rename as the Buzios field, contains about 3.1 billion barrels of oil equivalent. Petrobras said it expects to have five production systems started in the field by 2020. The Sul de Tupi, which the company wants to name the Sul de Lula field, may contain as much as 128 million barrels of oil equivalent, the company said. Petrobas said first oil should come from the Sul de Lula field by the first quarter […]

Posted On : Published By : Tom Whipple
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BP to Write Off $1 Billion on Failed Well

BP PLC said Wednesday it would write off more than $1 billion in costs related to an unsuccessful Brazilian well, but also said it made a large oil discovery in the deep water Gulf of Mexico. BP said the Pitanga exploration well on Block BM-CAOL-13 in the Camamu-Almada basin, offshore Brazil, found no commercial quantities of oil or gas. The company said it would therefore write off $1.08 billion in costs, of which $850 million relates to the value of the block […]

Posted On : Published By : Tom Whipple
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BP to Write Off $1 Billion on Failed Well

BP PLC said Wednesday it would write off more than $1 billion in costs related to an unsuccessful Brazilian well, but also said it made a large oil discovery in the deep water Gulf of Mexico. BP said the Pitanga exploration well on Block BM-CAOL-13 in the Camamu-Almada basin, offshore Brazil, found no commercial quantities of oil or gas. The company said it would therefore write off $1.08 billion in costs, of which $850 million relates to the value of the […]

Posted On : Published By : Tom Whipple
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Rousseff Says Brazil’s Take From Libra Oil Project to Top $400 Billion

Brazil will get more than $400 billion in royalties and crude oil over the next 35 years from its share of the massive Libra offshore oil prospect, President Dilma Rousseff said Tuesday. In her weekly question-and-answer column with Brazilians, Ms. Rousseff said that new production-sharing agreements for Brazil’s offshore oil discoveries ensured the country’s "sovereignty over this treasure, with great benefits for the population and our economy." Ms. Rousseff’s administration has faced criticism from Brazilians who viewed the sale of the field as delivering Brazil’s natural resources into the hands of foreign companies. Protests marred the October auction, which featured heavy security by soldiers who fired tear gas in an attempt to disperse the crowd gathered outside the hotel where the sale was held. But the auction also generated lukewarm interest from private-sector companies that balked at the terms of the production-sharing agreements and heavy government oversight […]

Posted On : Published By : Tom Whipple
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Rousseff Says Brazil's Take From Libra Oil Project to Top $400 Billion

Brazil will get more than $400 billion in royalties and crude oil over the next 35 years from its share of the massive Libra offshore oil prospect, President Dilma Rousseff said Tuesday. In her weekly question-and-answer column with Brazilians, Ms. Rousseff said that new production-sharing agreements for Brazil’s offshore oil discoveries ensured the country’s "sovereignty over this treasure, with great benefits for the population and our economy." Ms. Rousseff’s administration has faced criticism from Brazilians who viewed the sale of the field as delivering Brazil’s natural resources into the hands of foreign companies. Protests marred the October auction, which featured heavy security by soldiers who fired tear gas in an attempt to disperse the crowd gathered outside the hotel where the sale was held. But the auction also generated lukewarm interest from private-sector companies that balked at the terms of the production-sharing agreements and heavy government oversight […]

Posted On : Published By : Tom Whipple