Transocean Ltd., the world’s largest offshore rig contractor, has been linked for the first time to the corruption probe of Petroleo Brasileiro SA, the state-owned energy giant at the center of Brazil’s biggest corporate scandal.
A former executive at Brazil’s state-run oil company has testified to receiving what he says were payments made by someone claiming to be a Transocean agent in exchange for a rig- operation contract from Petrobras.
“Transocean has a long-standing commitment to and upholds the highest standards for corporate ethics and compliance,” the company said in an e-mailed response. “Our employees -- and everyone conducting business on our behalf -- are required to adhere to our high standards for integrity, honesty, financial discipline and legal and regulatory compliance.”
Just as gas export-terminals are preparing to start up along America’s Gulf Coast, the oil-price crash has made it unprofitable to send the U.S. fuel abroad, according to the North America head of power and natural gas supplier Engie.
It costs about $2 to liquefy gas and another $3 to take it from the U.S. to Asia, said Zin Smati, president and chief executive officer of Engie’s GDF Suez Energy North America. Engie changed its name from GDF Suez SA in April.
Those costs used to leave plenty of profit margin when the gap between LNG prices in Asia and natural gas in the U.S. was more than $14 per million British thermal units. Now, the spread is less than $5, according to data compiled by Bloomberg.
Repsol SA, Spain’s biggest oil company, is exploring options including a sale of part or all of its stake in Gas Natural SDG SA to shore up its balance sheet amid low oil prices, according to people familiar with the matter.
Repsol, whose 30 percent stake in the Spanish natural gas distributor is valued at about 5.2 billion euros ($5.9 billion), is discussing potential deal structures with advisers, the people said, asking not to be identified because the discussions are private.
As well as a full or partial sale, which could come as soon as this year, options include selling shares in the market and finding partners to join Gas Natural’s shareholder structure, the people said.
Oil rebounded to trade near $45 a barrel as investors weighed shrinking US stockpiles against signs of lower demand for crude as refineries shut for maintenance.
The pressure is mounting on the European Union to tighten rules on pollution from cars after Volkswagen AG admitted it built a system to undermine tests in the US.
Members of the European Parliament’s environment committee urged the European Commission to propose more stringent checks amid the widening scandal over emissions controls on VW’s diesel engines. VW has cheated on US air pollution tests for years, the Environmental Protection Agency said Friday.
“We must assume that there are many tricks going on in Europe without us realizing because the Americans check more than we do,” said Peter Liese, a German member of the parliamentary committee, said in parliament in Brussels on Wednesday. “We need more realistic, stringent procedures not only for NOx but also for carbon dioxide and fuel consumption. We all know that our cars use more fuel than in the test cycle and people are losing patience.”
Russia’s Economy Ministry criticized a proposed tax increase on the nation’s main revenue source, crude producers, saying it may hurt output and the budget in the long term.
The oil-extraction tax formula proposed by the Finance Ministry last week would hurt “the economics of working deposits and in fact would ’kill’ production at the most efficient fields in terms of tax performance,” Deputy Economy Minister Nikolay Podguzov said.
“Clearly, if production decreases, taxes also fall.”
Total SA, Europe’s second-biggest oil company, scaled back its production target for 2017 as it announced a further round of investment cuts and project delays to protect its dividend.
Total expects to produce 2.6 million barrels of oil equivalent a day, compared with a previous forecast of 2.8 million barrels a day, the company said Wednesday before holding an investor day in London.
The measures are a sign that oil majors are extending their belt-tightening into next year and 2017 after companies from Chevron Corp. to Royal Dutch Shell Plc announced large spending cuts for 2015.
The worst commodity meltdown since 2008 probably isn’t the end of the pain for bulls, according to Citigroup Inc.
Excess supplies and a sluggish world economy mean that it’s “hard to argue that most commodity prices have reached their trough for the year,” analysts led by Ed Morse, the global head of commodities research, said in a report Tuesday. The bank is bearish on crude oil, aluminum, platinum, iron ore, cocoa and wheat in the next three to six months.
Returns from raw materials are languishing near a 16-year low as inventories climb just as demand growth slows in China, the world’s biggest consumer of everything from cotton to zinc. Money has been flowing out of funds linked to metals, crops and energy, while investors have punished shares of miners and oil drillers.
It’s unlikely that oil prices will ever return to $100 a barrel and Petroleo Brasileiro SA needs to work with suppliers to manage the price rout, an executive at the state-run oil producer said Tuesday.
Iraq’s self-governing Kurds can’t sell Iraqi crude oil in the U.S. under a court decision that puts a fresh hurdle in the path of Kurdish efforts to achieve financial independence from the central government in Baghdad.
The U.S. Court of Appeals for the Fifth Circuit in New Orleans dismissed an attempt by the Kurdistan Regional Government to overturn a judge’s earlier decision against its planned sale of oil to an unidentified buyer in the U.S. The KRG’s eventual sale of the disputed cargo in Israel made the appeal moot, the court said in a ruling.
In New Auburn, Wisconsin, a desolate, little outpost carved from the rolling pine-tree forests that run into Lake Superior, the collapse in oil is wreaking havoc on every aspect of the economy.
Denmark is preparing what may become the biggest initial public offering in the nation’s history as it sets a road map for the sale of state utility Dong Energy.
Russian detectives arrested Vyacheslav Gaizer, governor of the oil-rich Komi region, over charges he was involved in running an organized criminal group.
About $1.5trillion of potential investment in new oil projects isn’t viable with crude prices at $50 a barrel, highlighting the need to reduce costs, according to consultant Wood Mackenzie Ltd.
Hedge funds slashed their bets on falling oil prices, leaving them the most bullish in two months as OPEC called for a return to $80 crude.
Money managers’ net-long position in West Texas Intermediate rose by 14,821 contracts to 147,678 futures and options in the week ended Sept. 15, according to data from the Commodity Futures Trading Commission. That’s the highest level since July 7.
The Organization of Petroleum Exporting Countries expects crude prices to rise to $80 by 2020 as output falls elsewhere. U.S. production could sink by the most in 27 years in 2016 as the price rout extends a slump in drilling. Speculators closed out short positions two days before the Federal Reserve decided not to raise key U.S. interest rates.
Libya’s internationally recognized government plans to boost oil production five-fold and will punish companies working with a rival cabinet striving to control the divided North African nation’s crude deposits.
Oil companies operating in Libya or seeking to do so must register with the National Oil Corp. controlled by the elected government based in the country’s eastern region, Deputy Prime Minister Abdussalam Elbadri said Wednesday at a conference in Valletta, Malta.
The NOC will refuse to renew the contracts of any companies that don’t support the elected government, NOC Chairman Nagi Elmagrabi said in an interview in Valletta. The country plans to boost crude output to 2 million barrels a day by 2020, he said.
To see how oil traders are profiting from the longest-lasting glut in three decades, look at the tiny Caribbean island of St. Lucia.
Glencore Plc hired tanks at the island’s only oil terminal to stow crude, joining Vitol Group, people familiar with the matter said last week. They’re responding to the market’s deepening contango, a situation where prices today are lower than those in future months, allowing traders with access to storage to lock in a profit. From St. Lucia to South Africa to Rotterdam, they’re seizing the opportunity.
“Contango opportunities are emerging,” Ian Taylor, chief executive officer of Vitol, the world’s largest independent oil trader, said in an interview earlier this month.
While the oil market has been in contango since August 2014, in the last month prices have moved in a direction that makes the trade more profitable. The price difference between a Brent oil contract for immediate delivery, the global benchmark, and one-year forward stood at minus $7.82 a barrel on Tuesday, more than double its level in mid-July.
Kenya and Uganda ended months of debate in August to sign an agreement on an oil pipeline costing almost $4 billion. Finding the money to build it and companies to start pumping crude may be a harder task.
The 1,500-kilometer (930-mile) pipeline is key for exporting the region’s crude when production finally begins -- 2018 in Uganda’s case. With oil prices languishing below $50 a barrel, there’s little incentive for companies such as Tullow Oil Plc, Africa Oil Corp., China’s CNOOC Ltd. and France’s Total SA to keep investing.
“The lower oil price has created a great deal more of uncertainty around future oil production, given that additional capital expenditure will be required to make oil production a reality,” Razia Khan, head of Africa economic research at Standard Chartered Plc in London, said in an e-mailed response to questions.
Venezuelan proposals for a summit between OPEC and non-OPEC producers are advancing, and should focus on bolstering oil prices rather than limiting volumes, government officials said Tuesday.
The country seeks a fair price for oil that will support economic growth and energy demand, Oil Minister Eulogio Del Pino said in an interview at Tuesday’s meeting between Venezuela and Saudi Arabia officials in Caracas. The oil price floor Venezuela is suggesting would be analyzed every quarter, he said.
The Organization of Petroleum Exporting Countries has come under pressure from Venezuela and some other members to take action after the group decided last November not to reduce output. Saudi Arabia led OPEC’s decision to compete for market share against US shale producers rather than support prices. Oil in New York and London reached six-year lows last month amid excess global supply.
Iraq asked oil companies to reduce their 2016 spending plans in the country by Sept. 30, citing lower oil prices and government revenue.
The reduced budgets shouldn’t affect 2015 production, Abdul Mahdy Al-Ameedi, director of licensing at Iraq’s oil ministry, said by phone Tuesday, citing a letter that the ministry sent to companies.
Iraq is now producing more than 3 million barrels a day, he said.
“We’ve asked them in a letter we sent them to take into consideration the drop in oil prices and the low revenues of the government that may not cover their investments,” al-Ameedi said. “There was a stipulation that this investment reduction must not affect oil output from the fields that was in the 2015 schedule.”
In the race to supply crude to the world’s biggest energy user, it’s the tussle for second place that’s too close to call.
Russia, Angola and Iran are vying to be runner-up to Saudi Arabia as the top seller to China. The contest is set to intensify as Iran seeks to recover market share lost because of sanctions and the US Congress debates a nuclear deal that’ll allow the Persian Gulf state to boost shipments.
China overtook the US as the biggest importer of crude most recently in June, taking advantage of a 50 percent slump in benchmark prices over the past year to boost strategic reserves. With the Asian nation forecast to account for more than a quarter of global demand growth in 2016, the prize of becoming a top supplier will bolster the economic health of national producers that depend on energy exports for most of their budget revenue.
