Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 07 November 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening or Tueday morning.
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Covington driller finds some success in deep offshore wells, looks to sell oil by 2022 – Covington-based LLOG Exploration found some successful oil production in two deepwater wells in the Gulf of Mexico after its initial discovery in mid-2019. LLOG Exploration has been bullish on investing in new oil and gas discoveries in the Gulf of Mexico despite a deeply depressed oil price market. The Spruance discovery happened when the company and its partners drilled below 1,600 feet of water using a subsalt exploratory well. Since then, one well has been drilled 17,000 feet and has shown about 150 net feet of oil play, which refers to the thickness of the oil reservoir. For scope, one of the most prolific wells, known as Shenandoah and drilled by ConocoPhillips, Marathon and Anadarko, had 1,000 feet of net play in 2013. But it’s first appraisal in 2009 only found 300 net feet of oil play. In early October, a second well was drilled by LLOG Exploration at a 16,600-foot total depth and there was more than 200 net feet of oil discovered. The company expects to complete the wells in 2021 and begin selling oil by 2022. “The results of the second well confirmed our understanding of the field’s reserve potential,” Philip LeJeune, CEO of LLOG Exploration said in a news release. LLOG inked a deal with Houston-based EnVen to use The Lobster oil platform, which sits 130 miles south of New Orleans in water 775 feet deep, to complete the wells in a production handling agreement for processing the oil and gas reserves. There were only 13 active oil rigs in the U.S. Gulf of Mexico as of Oct. 30, down from roughly 21 rigs one year ago, according to Baker Hughes data. There were only 9 active oil rigs in the Gulf of Mexico in 2016, a particularly low point since 2011. In Louisiana, there were 37 active rigs onshore as of late October, according to Baker Hughes data, down from 56 rigs one year ago.
Houston energy exec charged with bilking investors out of $1.2 million in oil and gas deals — A Houston energy exec has been charged in an elaborate scheme to defraud 21 investors out of $1.2 million in oil and gas transactions, according to U.S. Attorney Ryan K. Patrick. A federal grand jury returned a 12-count indictment against Arael Doolittle, 55 who heads Sariel Petroleum LLC and Sariel Enterprises LLC. According to Law 360, Doolittle operated a company that used bogus letters, phony email addresses and a bank account under the name of a Chevron-affiliated company in order to dupe companies into doing business with it.”Doolittle falsely represented he had the necessary pre-existing relationships with major refiners and petroleum product suppliers to purchase fuels for resale to his customers,” the U.S. Attorney’s release stated.The indictment also alleges that Doolittle provided falsified documents to investors to substantiate and legitimize his holdings.The energy exec was slapped with eight counts of wire fraud and four counts of engaging in monetary transactions i n criminally derived funds. If convicted of wire fraud, Doolittle faces a potential 20-year-maximum sentence and a possible $250,000 maximum fine.
Houston energy companies cut losses; oil surges after vote -Houston oil and gas companies Apache Corp., Talos Energy and Weatherford pared their losses in the third quarter as production resumed after crude prices stabilized around $40 a barrel. Despite improved third-quarter results, oil and gas companies face a slow recovery from the economic fallout caused by the pandemic, which could keep global oil demand below pre-coronavirus levels until at least 2023, according to the International Energy Agency. If crude prices continue to hover around $40 a barrel, exploration and production companies will keep deferring drilling of new wells, hurting prospects for future production growth as well as job growth for oil field service contractors.U.S. oil futures climbed back to near the psychological benchmark Wednesday, the most in a month, with West Texas Intermediate rising $1.49 to $39.15 as the U.S. presidential election still had no winner. Meanwhile, oil company stocks surged as Republicans appeared to remain in control of the Senate, hindering Democrats’ plans to promote clean energy. Exxon Mobil and Chevron shares gained more than 2 percent each before closing about flat for the day. Apache, whose shares climbed by more than 6 percent Wednesday before slipping slightly, lost $4 million compared with a loss of $386 million in the second quarter. Revenue increased by 52 percent to $1.1 billion from $752 million in the second quarter. The exploration and production company, which released its results after the close of markets Wednesday, attributed its improved financial results to cost-cutting measures and restarting production during the third quarter. It produced 445,000 barrels of oil equivalent a day during the quarter. Talos, an offshore driller focused in the Gulf of Mexico, lost $52 million compared with a loss of $140.6 million in the second quarter. Revenue increased by 52 percent to $135.1 million from $88.9 million in the second quarter. The company, which also released results after markets closed Wednesday, said its third-quarter financial results were challenged by the busiest hurricane season in the past 15 years. CEO Tim Duncan said the storms didn’t significantly damage its offshore platforms, but forced the company to delay projects and halt production for a total of about a month during the third quarter. Weatherford on Tuesday said it lost $174 million compared with a loss of $581 million in the second quarter. Revenue fell slightly to $807 million, down from $821 million in the second quarter. The oil-field services company, which emerged from bankruptcy in December, said it improved financial results as production resumed and after making steep cuts to operations. Weatherford laid off about 6,000 workers, or about a quarter of its global workforce, to weather the pandemic. These layoffs and other cost-cutting measures are expected to generate more than $800 million of annual savings, the company said.
Texas Oil, Gas Economy Shrinks as Drilling Activity, Jobs Decline – The Texas upstream oil and gas economy remained in contraction through the first nine months of the year, with the near-term outlook murky, according to a top state energy group. The Texas Alliance of Energy Producers (TAEP), which serves more than 3,000 members, said the Texas Petro Index (TPI) for September indicated the exploration and production (E&P) activity index declined for the 19th straight month, to 145.4 from 150.4 in August. The monthly E&P index also was down by 27.5% year/year. The TPI peaked at 213.8 in February 2019, but it has lost nearly one-third (32%) of its value since then, TAEP noted. The all-time record high was 313.9 in November 2014. “The Texas Petro Index shows that the upstream oil and gas economy in Texas was in a state of contraction for virtually all of 2019 and early 2020, even before Covid-19 came along,” said TAEP petroleum economist Karr Ingham, who created the index. “But the downturn obviously sharpened in March of this year as the rapid demand loss – coupled with a market share fight between Saudi Arabia and Russia – began to cripple oil and gas development activity in the U.S.” Of the 32% loss since the peak in early 2019, more than 23% has occurred since last February. The April TPI decline was the largest one-month fall in the history of the analysis, the petroleum economist noted. Oil prices have recovered somewhat since, but “other measures of statewide E&P activity are just now finding their Covid low points, including the rig count, drilling permits and industry employment.” The upstream industry in fact added a few jobs in September. If those job gains hold, it would be the first increase in the state’s E&P jobs since the onset of the pandemic, “and in fact the first industry employment additions since April 2019.” The most recent peak in upstream oil and gas jobs was about 228,450 in December 2018. Industry employment generally has declined steadily since then.
MPLX Expecting Slower Growth, but Permian, Marcellus Volumes Fueling Optimism – In an ongoing effort to optimize capital spending amid the weak oil price environment, MPLX LP brought online the first segment of the Wink-to-Webster pipeline to ultimately transport more than 1 million b/d of Permian Basin crude to the Houston area. The main segment of the 650-mile pipeline was commissioned in October, and service is expected to be available for shippers by the end of the year. Additional segments are expected to be placed in service throughout 2021. Speaking Monday on the 3Q2020 earnings call, CEO Michael Hennigan said the joint venture partners in the project looked at how they “could optimize capital spending” during the final months of what has been an unprecedented year in the oil and gas industry. With the early completion of the main segment from Midland, TX, to Houston, they opted to bring that portion of the system online ahead of time. “It’s part of the optimization process. Instead of waiting for the whole thing, there is a piece of the project that could start up sooner,” Hennigan said. There was barely a mention of another Permian takeaway project, the Whistler natural gas pipeline that would transport 2 Bcf/d. However, management indicated Whistler is on track to start up in the second half of next year. More than 90% of the project is committed with MVCs. West Texas has been one of the bright spots for MPLX in the gathering and processing (G&P) segment. The midstreamer indicated that West Texas was one of only two regions that reported higher G&P volumes in the third quarter. Gathered volumes in the basin rose 3% year/year. The Marcellus Shale also was a source of growth for MPLX. Gathered volumes averaged 1.3 Bcf/d in the third quarter, also up 3% year/year. Processing volumes increased 8% year/year to a record 5.7 Bcf/d. Fractionated volumes jumped 10% to 477,000 b/d as the Hopedale 5 fractionator began operations in the quarter. This drove total fractionated volumes to an average 567,000 b/d, up 4% over 3Q2019. Despite the pressure on commodity prices, MPLX management remains optimistic in the outlook for natural gas and natural gas liquids (NGL) demand and price recovery. CFO Pamela Beall said the recent recovery in futures prices is “beneficial” for MPLX’s natural gas and NGL producer customers, “as they can take advantage of hedging opportunities and realize a positive impact on operating results, as well as their borrowing base redetermination.”
Republican Jim Wright leads Texas Railroad Commission race – Republican Jim Wright had a solid lead over Democrat Chrysta Castañeda early Wednesday morning in the race for Texas Railroad Commissioner, according to unofficial results from Decision Desk HQ.Wright was ahead of Castañeda, 53.4% to 43.2%, with an estimated 87.3% of votes counted. Libertarian candidate Matt Sterett had 2.2%, and Green Party candidate Katija “Kat” Gruene had 1.2%.Castañeda conceded Wednesday morning and said she was “grateful to the millions of Texans who turned out and voted for a cleaner, healthier Texas” in a written statement on Twitter.“Our movement is about more than just this election, so even though we may not have won this round, we have made a tremendous impact,” Castañeda said.The Railroad Commission of Texas regulates the state’s massive oil and gas industry, and its elected, three-member board has been entirely Republican for at least 25 years. No Democrat has been elected to any statewide seat in Texas since 1994.But this year, with attention on Texas races up and down the ballot, a virtually unknown Republican candidate and big-time donations to the Democratic nominee,Democrats thought they had a shot.Wright, who owns an oilfield waste services company, shockingly defeated the incumbent railroad commissioner, Ryan Sitton, in the March primary. Sitton, elected in 2014, raised significantly more money and had the support of top state leaders including Gov. Greg Abbott, Lt. Gov. Dan Patrick and both of the state’s Republican U.S. senators.
The Energy 202: The oil industry thinks it can work with Biden, despite call for ‘transition’ away from it – Joe Biden said he wanted a “transition” away from the oil industry. But the oil industry itself thinks it can still work with the Democratic nominee should he win the White House in today’s election. There is a lot that the American Petroleum Institute, Washington’s biggest lobbying group for the U.S. oil and gas industry, does not like about the former vice president’s sweeping plan for addressing climate change. But on the eve of an election in which Biden is favored to win, Mike Sommers, the head of the trade association, says he sees room to work with a Democratic administration – even as the rise in global temperatures and the oil industry’s contributions to it become a bigger concern for the party’s voters.“The campaign has been pretty closed off to outside organizations like API,” Sommers said in an interview Friday. But he added: “It’ll be different if there is a Biden transition, and we would seek to engage a Biden transition team.” A former chief of staff to ex-House speaker John A. Boehner (R-Ohio), Sommers arrived at API in 2018 from the world of GOP politics. During this and previous election cycles, the oil and gas sector donated disproportionately to Republicans. Over the past four years, President Trump has modified or rolled back dozen of environmental rules, including several affecting drilling and pipeline construction, and opened hundreds of thousands of acres to oil and gas extraction. Biden, meanwhile, has vowed to end oil and gas leasing on federal lands and to reinstate many of the regulations. Still, the oil industry sees two areas where it can work with Biden – sucking up climate-warming emissions and cooling off trade wars. Sommers hopes a Biden administration, along with Democrats in Congress, will boost tax breaks for companies that capture carbon dioxide before it reaches the air. Tax deductions enacted two years ago provide as much as $50 for each ton of the greenhouse gas captured and stored underground. Biden’s $2 trillion climate plan calls for even more investment in that nascent technology.“We were encouraged by that,” Sommers said. “That’s one area where I think he would see a welcome partner within the oil and gas industry.”
MPCA sidelines science in Line 3 water permitting process | MinnPost – Interestingly, “environmental damage” and “oil pipeline” and “water impacts” and “oil spill” were not considered by the Minnesota Pollution Control Agency (MPCA) when issuing a draft water permit to construct the new and expanded Enbridge tar sands oil Line 3 pipeline across northern Minnesota and the Mississippi headwaters. We are four of the scientists who submitted scientific comments to the MPCA about the project’s required 401 water crossing permit, which led to this summer’s contested case hearing. In October, the administrative law judge ruled in favor of the MPCA’s draft permit. As scientists who have worked in water resources management, geology, ecosystem assessment, energy systems, and public health, we were shocked at how independent science has been largely ignored in the permit review process. We want to share what we learned with other Minnesotans, and to assert that a comprehensive scientific assessment of the Line 3 project has not yet been accomplished. We observed that:
- Independent scientists like us only had limited opportunity for input at the tail end of a long process, which included a “draft permit approval” before the public even got to view the record. By the time we were allowed to communicate our technical concerns to MPCA, it had already committed to disregarding much of the science about climate, water and land. In contrast, the record shows that Enbridge’s engineers and staff had many months of insider access to MPCA staff, with meetings and long-running email threads. That let Enbridge permeate the process and influence the terms of discussion from the very beginning, a phenomenon others have labeled “regulatory capture.”
- While MPCA staff should function as independent scientists on behalf of the public good, they cannot. Agency leaders have chosen to narrowly define the role of a regulatory agency in terms of what it can do and consider. For example, MPCA leadership decided – incorrectly, by our assessment – that they could not take into account three scientific problems that directly bear on this project: 1) the cumulative impacts that this project’s 212 stream crossings and thousands of acres of wetland crossings will have on water quality, what we described as “death by a thousand cuts”; 2) the downstream effects of oil spills, and 3) climate change. By pre-determining what science their staff could and could not pay attention to, they entered into this permitting process with one hand tied behind their back, scientifically speaking.
- Good scientific decisions take into account the collective knowledge produced by many researchers. For example, we cited 120 studies and reports in our public comment to the MPCA. By contrast, Enbridge employees and MPCA staff leaned almost exclusively on statements like “in my experience” during their testimony. The judge accepted – indeed, actively affirmed – that as being most valuable, thus dealing a deathblow to science’s power to protect the public.
- Finally, we observed that a court of law is a remarkably poor place to conduct good science. Surely this should be the last resort. But it was the only venue for participation that we independent scientists were given. Further, this contested case hearing put the burden of proof on volunteer scientists, environmental groups and tribes to prove that this project will cause harm, rather than on Enbridge and the MPCA to show that it will not.
After years of contention, Keystone XL Pipeline plans continue; Company awards $1.6 billion to American construction firms What is … Estimated to cost $8 billion; Scheduled to cross 316 miles of South Dakota countryside, while featuring seven “pump stations” along the way; Capable of shipping 830,000 barrels of Canadian tar sands crude oil per day; Projected to create or support more than 60,000 jobs; Expected to generate more than $1.3 billion in annual earnings for the operator once it is up and running; and Continuing to be the source for legal disputes and environmental concerns, just as it has for more than a decade? Why, it’s TC Energy’s Keystone XL Pipeline, of course. On Wednesday, officials with the firm once known as TransCanada announced they had awarded more than $1.6 billion to six American contractors to work on the pipeline next year. Officials said they will eventually “employ more than 11,000 Americans in 2021,” with about 8,000 of these jobs expected to be “union.” “The awarding of 2021 U.S. construction contracts shows the continued momentum behind Keystone XL. The dedicated members of the Operating Engineers are eager and ready to build this critical piece of modern North American energy infrastructure to the highest quality standards,” said James T. Callahan, General President of the International Union of Operating Engineers. “The 8,000 American union jobs that come with 2021 construction is welcome news and irreplaceable as the U.S. continues our economic recovery.” The companies awarded contracts to work on the pipeline next year include: Barnard Pipeline (Bozeman, Montana); Associated Pipeline (Houston, Texas); Michels (Brownsville, Wisconsin); Precision Pipeline (Eau Claire, Wisconsin); Price Gregory International (Katy, Texas); and U.S. Pipeline (Houston, Texas). “With construction activities well underway in both the U.S. and Canada, Keystone XL is already playing a critical role in contributing to North America’s economic recovery,” project President Richard Prior said. “The selection of our U.S. construction contractors for 2021 is an important next step in employing thousands more American union workers and delivering tangible benefits to local communities and businesses.”
Keystone pipeline developer plans to sue to get construction permit in Nebraska county – The developer of the Keystone XL pipeline is planning to go to court to obtain a construction permit from a rural Nebraska county. A company spokeswoman made the comment after the five-member Holt County Board of Adjustment voted Thursday afternoon to deny a permit to TC Energy, formerly TransCanada, until the pipeline company agreed to comply with 19 conditions. The conditions included the establishment of an escrow account to cover any clean-up costs from possible future pipeline leaks and pay for the removal of the pipeline and reclamation of the land. The board also wanted TC Energy to bypass any fields that had underground drainage tiles and provide additional tests to detect any slow leaks from the crude oil pipeline. Robynn Tysver, a spokeswoman for TC Energy, said the company planned to go to court to obtain a pipeline construction permit, “which will unfortunately cost the county significant time and resources.” Meaningful journalism isn’t free. Subscribe to The World-Herald for $3 for your first 3 months Meaningful journalism isn’t free. Subscribe to The World-Herald for $3 for your first 3 months “A vote in our favor would have cleared the way for our crews to improve many of the county’s roads, as well as fund a large portion of the cost to replace the Stuart-Naper Bridge,” Tysver said. The vote Thursday was the latest development in TC Energy’s attempt to comply with zoning rules in the north-central Nebraska county. The county’s planning board and board of supervisors had previously denied a permit to TC Energy, stating that they wanted to wait until eminent domain proceedings were completed and until the company could identify where the pipeline might impact underground drainage tiles in fields. The county Board of Adjustment, which handles appeals of such matters, held a public hearing last week in O’Neill on the issue and then postponed a decision until the meeting on Thursday. Last week, an attorney for TC Energy testified that all legal proceedings had been completed but that some landowners had refused to disclose where drainage tiles were located. Opponents of the pipeline, meanwhile, urged the Board of Adjustment to reject the permit.
Colorado in Landmark Rule Moves to End Routine Flaring, Venting -Colorado would become the first state in the contiguous U.S. to put an end to the practice of routine flaring and venting of natural gas at drilling sites, under a rule change given preliminary approval Thursday. The Colorado Oil and Gas Conservation Commission’s 5-0 vote in favor of the proposed changes under Rule 903, which bans routine flaring and venting at oil and gas sites, would help to mitigate climate change, ensure groundwater is safe to drink, and protect soil resources that support healthy crops and vegetation, Julie Murphy, director of the commission, said in a statement.
Judge dismisses defamation claim by Dakota Access protester (AP) – A federal judge has dismissed part of a lawsuit by a New York City woman who was severely injured in an explosion while protesting the Dakota Access oil pipeline in North Dakota four years ago. In a 54-page ruling issued Thursday, U.S. District Judge Daniel Traynor dismissed claims of defamation against law enforcement officials who made public statements blaming the woman for her own injury. Sophia Wilansky, who was 21 at the time, suffered an arm injury in a violent November 2016 clash between protesters and police during the unsuccessful months-long protest in southern North Dakota against the pipeline. Protesters allege the blast was caused by a concussion grenade thrown by officers, but law enforcement said it was caused by a propane canister that protesters rigged to explode. Wilansky’s lawsuit filed two years ago also seeks millions of dollars for alleged excessive force, assault, negligence and emotional distress. Those parts of the lawsuit are still pending. Traynor, who is based in Bismarck, sided with government attorneys who argued statements about news events released to the public by law officers as part of their official duties are entitled to immunity. Government lawyers also argued that Wilansky’s father, Wayne, had given interviews to the news media giving her side of the story.
PIPELINES: NEPA fight over Dakota Access reaches D.C. Circuit — Wednesday, November 4, 2020 — A federal appeals court today will wade into a yearslong dispute led by the Standing Rock Sioux Tribe over the fate of the contentious Dakota Access pipeline.
Judges hear appeal on Dakota Access Pipeline permit, study – The dispute over the Dakota Access Pipeline reached a panel of appellate judges Wednesday, with a federal agency and the operator making their case as to why the line should forgo a lengthy environmental review and why a key permit should be reinstated.The Standing Rock Sioux and other tribes fighting the pipeline sought to keep in place part of a lower-court ruling that rescinded the pipeline’s easement for its Missouri River crossing just upstream of the Standing Rock Reservation, as well as another ruling ordering the U.S. Army Corps of Engineers to complete a thorough Environmental Impact Statement.The tribes fear a spill into the river would pollute their water supply. Corps attorney James Maysonett opened the hearing saying that the lower court “misapplied the law by ignoring the low risk of a spill.”The three judges on the U.S. Court of Appeals for the D.C. Circuit who listened to the case questioned him on numerous parts of the Corps’ argument, including the agency’s interpretation of pipeline operator Energy Transfer’s safety record. They referenced data for a subsidiary, Sunoco, showing that the company had 1.42 accidents per 1,000 miles of pipeline in 2019. That falls above a 2017 national industry standard of 0.848 accidents per 1,000 miles. Maysonett suggested that if the judges thought the agency needed to further analyze the company’s safety history, they could do so simply by directing the Corps to provide that information. “If that’s a critical issue, I think the answer to that is not to compel the preparation of an Environmental Impact Statement but to remand that question to the Corps to consider why they did or didn’t consider that and why it does or does not matter,” he said.
Environment ministry investigating, cleaning up oil spill – The Environmental Protection Ministry said Friday that it was investigating an oil spill from the Trans-Israel pipeline some three kilometers from the Ashkelon coast, as clear-up efforts began. “A local leak of light crude oil estimated to be around several cubic meters was discovered at the site, which occurred due to a malfunction in the emergency disconnection mechanism in the pipeline,” the ministry said in a statement. “The Trans-Israel pipeline sealed the pipe and began treating the spill by spraying a substance designed to disperse and dissolve the oil in the sea,” the statement said. TankerTrackers.com said the leak seemed to have happened after the hose decoupled from the pipeline following the delivery of 600,000 barrels of Russian crude oil via tanker. The ministry said it had opened an investigation into the leak, adding that it will “take all measures to prevent similar cases.” Additionally, as a precaution, the Ministry of Health has instructed the desalination facility in Ashkelon to disable the plant until clean-up efforts are completed. The spill comes after state prosecutors announced on Tuesday that the state-owned Eilat Ashkelon Pipeline Company (EAPC), which owns the Trans-Israel pipeline, along with five current and former senior executives at the company, could stand trial, pending a hearing, over its alleged role in an oil spill that devastated a nature reserve in southern Israel in 2014. The individuals involved in the case are suspected of “committing large-scale environmental offenses” as well as bearing responsibility for the resulting pollution from the oil spill, considered the worst ecological disaster in Israel’s history. According to the Environmental Protection Ministry, some 5 million liters of crude oil were spilled when a pipeline belonging to EAPC ruptured, causing significant environmental damage to the Arava desert and Evrona Nature Reserve. According to the Tuesday statement released by the ministry, during work to relocate a pipe on December 3, 2014, there was an engineering fault that caused the pipe to rupture, precipitating the oil spill, which caused some NIS 100 million in damage. The statement said that it was suspected the accident was mainly due to faulty implementation of EAPC’s own regulations, including the failure to draw up a detailed plan for the work and a lack of coordination between the relevant departments in the company. Over 80 people were treated for medical problems on both sides of the Israel-Jordan border following the spill, as crude oil flooded the Route 90 highway leading into Eilat. The vast majority of those initially affected were in Jordan.
Pantai Cermin pollution caused by ship engine oil – The pollution off Pantai Cermin in Port Dickson was caused by the engine oil of a vessel. Negeri Sembilan Health, Environment, Cooperatives and Consumerism Committee chairman S. Veerapan said sample analysis results of the black semi-solid liquid collected in the affected area were obtained on Oct 23. “We have submitted the results to the Marine Department (JLM) to ascertain the source (ship). “The department is still investigating, but the substance has been identified as ship engine oil,” he told reporters here today. He said the Department of Environment was also investigating the case under Section 34B (1) (a) of the Environmental Quality Act 1974. On Oct 12, a two-kilometre stretch along Pantai Cermin was found to be polluted by an oil spill, and the incident caught the attention of Environment and Water Minister Datuk Seri Tuan Ibrahim Tuan Man who inspected the location the next day.
Oil spill in Misamis Oriental town probed – The cleanup of an oil spill that ravaged the coasts of a village in a town in Misamis Oriental province is almost done but the search for its culprit has just begun. Sabas Tagarda Jr., chief of Lower Jasaan village in Jasaan town, said that as of Friday, a big part of the black substance floating in the coasts was taken out although it might take a few more days to have these totally cleaned. Volunteers from the village and workers from the nearby ship building and repair firm Philippine Iron Construction and Marine Works Inc. (PICMWI) are doing the cleanup. The oil spill was first discovered by fishermen on Monday, preventing them from setting sail. It has spread to an estimated 5-hectare stretch of the municipal waters. As of Tuesday, the spill was already contained but Tagarda lamented that it had damaged the stretch of newly planted mangrove species in the village’s coast. Petty Officer 2nd Class Ronald Moncayo, acting chief of the Philippine Coast Guard’s Marine Environmental Protection Force in Misamis Oriental, said the substance that was discharged was bilge oil that accumulates at a ship’s engine room. Moncayo added that they were still finding out how the oil from the bilge, which is located on the bottom part of a vessel, was discharged to the sea. “Any of the more than 20 ships that are docked at the PICMWI shipyard could be responsible,” he said. Among those docked at the shipyard are tugboats, passenger vessels and cargo ships. As of Wednesday, Moncayo said more than 200 liters of the oil were retrieved.
Mauritius oil spill clean-up likely to be completed by January – The clean-up of a massive oil spill in August from a vessel off Mauritius will likely be mostly completed by January, the bulk carrier’s owner, Japan’s Nagashiki Shipping, said on Thursday. Of the roughly 1,000 tonnes that spilled from the Panamanian-flagged MV Wakashio, all of the oil that had been floating in the ocean had been recovered, Nagashiki Shipping said in a statement. Work to remove the oil along approximately 30 km (18.6 miles) of coastline was proceeding smoothly and would likely be completed by January, it said. The vessel, chartered by Mitsui OSK Lines Ltd , ran aground on a reef in Mauritius on July 25 and began leaking oil on Aug. 6. The spilt oil had spread over a vast area of endangered corals, affecting fish and other marine life in what some scientists have called the Indian Ocean island’s worst ecological disaster. Nagashiki Shipping also said the planned removal of the rear portion of the vessel would begin in late December and last several months. The front part was scuttled in August as instructed by local authorities.
Oil Spill again pollutes Okpoama communities in Bayelsa– Another oil leak, the third in six months, has discharged a yet-to-be-ascertained volume of crude oil polluting the Okpoama community and its environs in Brass Local Government Area of Bayelsa. The leak reportedly occurred on Oct. 28 on the 50-year-old Ogoda-Brass crude pipeline belonging to the Nigerian Agip Oil Company (NAOC) near the oil firm’s crude export terminal. Chief Inikio Sele-D, Chairman of Okpoama Kingdom Chiefs’ Council, had earlier the told News Agency of Nigeria (NAN) that two oil leaks were reported on May 12 and on Oct 8. Mr Tarinyo Akono, former Chairman of the Bayelsa State Council of the Nigeria Union of Journalists (NUJ) who hails from Okpoama also told NAN on Monday in Yenagoa that frequent spills from Agip’s facilities had wrought untold hardship on the fishing communities.
Russian oil bosses debate extending output curbs into 2021: sources (Reuters) – Top managers of Russian oil companies and Russian Energy Minister Alexander Novak on Monday discussed a possible extension of oil output restrictions into the first quarter of 2021, two industry sources said. The Organization of the Petroleum Exporting Countries (OPEC) and Russia imposed a record oil output cut in April to support prices as the COVID-19 pandemic shrank demand. They are considering further steps as the global number of coronavirus cases is rising sharply. Russian oil companies and Novak discussed three options on Monday, a source familiar with the talks told Reuters on condition of anonymity. One of the options was to extend the current output curbs into the first quarter of 2021, the source said. The two other options were to increase oil output in January, as planned, or to cut output even further. Another industry source said a three-month extension of the agreement by OPEC+, as the grouping of OPEC and allied producers is named, was possible because of concern about the impact of the second wave of the pandemic. Russian oil and gas condensate output rose to 9.98 million barrels per day (bpd) in October from 9.93 million bpd a month earlier, indicating Russia’s output was close to its quota or slightly above it. Russian Deputy Energy Minister Pavel Sorokin, who declined to comment on future OPEC+ decisions, said on Monday the global oil market would depend on how countries act to the ongoing pandemic. Russia has said it will not impose a new lockdown despite reporting a record rise in infections, while Europe has turned to wide-scale restrictions. The sources said the final oil output decision will be made by President Vladimir Putin, who last month did not rule out extending deep oil cuts for longer if market conditions warranted.
Oil reverses steep loss to gain nearly 3% despite rising Covid-19 cases – Oil prices gained more than 2% Monday, shaking off earlier losses, as the United States heads into a contentious U.S. presidential election. The oil market has been under pressure in recent days, hit by concerns about weaker fuel demand as several European countries went into lockdown to curb the coronavirus. New infections spiked in the United States as well. Brent crude rose $1.14, or 3%, to trade at $39.08 per barrel. West Texas Intermediate settled $1.02, or 2.8%, higher at $36.81 per barrel. Both contracts fell more than $2 earlier in the session. Oil pared some losses after Japan’s export orders grew for the first time in two years and China’s factory activity rose to its highest in nearly a decade in October. Further, U.S. manufacturing activity accelerated more than expected in October, with new orders jumping to their highest level in nearly 17 years. U.S. stock indexes, which energy futures at times track with, rose on Monday. Analysts said the election outcome most likely to shake equity markets in the near-term would be if there is no clear winner on Tuesday night, as several states remain where votes will need to be counted. “The concerns over oil supply and demand fundamentals … are going to play second fiddle to the U.S. presidential election and to how risk markets will react to the outcome,” Countries across Europe have reimposed lockdown measures to try to slow COVID-19 infection rates that have accelerated over the past month. Global oil trading companies and analysts expect further demand destruction because of the resurgence of virus cases, though estimates differ. Vitol sees winter demand at 96 million barrels per day (bpd) while Trafigura expects demand to drop to 92 million bpd or lower. Rystad Energy sees demand peaking in 2028, instead of in 2030, and sees a slower recovery next year. “The lockdowns will stunt economic recovery in the short-term and in the long-term and the pandemic will also leave behind a legacy of behavioral changes that will also affect oil use,” said Rystad Energy’s Artyom Tchen. Libyan supply stands at about 800,000 bpd, up more than 100,000 bpd from a few days ago, a Libyan source told Reuters on Saturday. That, and the recent rebound in U.S. operating rigs, is worrying investors concerned about supply again outpacing demand. Output from the Organization of the Petroleum Exporting Countries (OPEC) rose for a fourth month in October, a Reuters survey found. OPEC and allies including Russia are cutting output by about 7.7 million bpd to support prices. This OPEC+ group is scheduled to hold a policy meeting on Nov. 30 and Dec. 1, with some analysts expecting a postponement of plans to ramp up output by 2 million bpd from January.
Oil rises ahead of US elections and as Europe locks down – Oil prices gained nearly 3 percent on Monday, paring earlier losses, on the eve of what is almost certain to be a contentious presidential election in the United States and as major economies in Europe go back into lockdown in an effort to stem rising coronavirus infections. Global benchmark Brent crude for January delivery rose $1.03 or 2.7 percent to settle at $38.97 a barrel on Monday, while US benchmark West Texas Intermediate (WTI) crude for December delivery rose $1.02 or nearly 3 percent to settle at $36.81 a barrel. Both contracts fell earlier in the session after a sharp selloff last week when Brent fell 12 percent to below $38 a barrel – exiting its five-month trading range. But reports that Russia is considering delaying its planned loosening of the taps in January helped lift prices later in the session on Monday. The Organization of Petroleum Exporting Countries and its allies including Russia, a grouping known as OPEC+, have cut output by about 7.7 million bpd to prop up sliding oil prices. Goldman analysts forecast a delay in plans to ramp up output in January. The next OPEC+ meeting kicks off on November 30. Oil markets have been under pressure in recent days as business and travel-sapping lockdowns return to Germany, France, Italy and the United Kingdom. Also adding pressure on prices, Libya substantially upped its oil production in recent days. “With plenty to worry about in the oil market – lockdowns, Libya, Iran, shale resilience – such a move lower is not surprising,” Goldman Sachs crude analysts wrote in a Sunday note. “This is consistent with our ‘patient bulls’ view that the second stage of the market rebalancing – the ‘cyclical recovery’ – would take time [and] require patience.” A Rystad Energy analysis expects Libya’s crude oil output to average approximately 750,000 bpd in November and climb to 1 million bpd in February 2021 Healthy readings on global factory activity also helped buoy oil prices on Monday. Japan’s export orders saw a boost and China’s factory activity rose to its highest level in nearly 10 years in October. In the US, the ISM manufacturing index also increased more than expected in October with spikes in production, new orders, and employment components.
Oil rises nearly 3% as U.S. presidential election looms – (Reuters) – Oil prices gained nearly 3% on Monday, rebounding from several day of losses built on concerns of rising coronavirus cases, one day before the end of U.S. presidential election voting. The oil market has been under pressure, due to concerns about weaker fuel demand as several European countries restarted lockdowns to curb the coronavirus. Infections recently hit a daily record in the United States as well, and major oil trading merchants believe it could stall out the recovery in demand. Brent crude LCOc1 gained $1.03, or 2.7%, to settle at $38.97 a barrel. U.S. West Texas Intermediate CLc1 ended $1.02, or 2.9%, higher at $36.81 a barrel. Both contracts fell more than $2 earlier in the session, but rebounded strong factory data in Asia and the United States. U.S. manufacturing activity accelerated more than expected in October, with new orders jumping to their highest level in nearly 17 years. U.S. stock indexes, which energy futures at times track with, rose on Monday. Analysts said the election outcome most likely to shake equity markets in the near-term would be if there is no clear winner on Tuesday night, as several states remain where votes will need to be counted. “The concerns over oil supply and demand fundamentals … are going to play second fiddle to the U.S. presidential election and to how risk markets will react to the outcome,” said BNP Paribas analyst Harry Tchilinguirian. Global oil trading companies and analysts expect further demand destruction because of the resurgence of virus cases. Countries across Europe have reimposed lockdown measures to try to slow COVID-19 infection rates that have accelerated over the past month.
Oil rises 2% but traders brace for wild ride on U.S. Election Day –(Reuters) – Oil prices rose 2% on Tuesday, advancing with other financial markets on U.S. Election Day although traders were bracing for volatility depending on the voting results and as surging coronavirus cases around the world fed worries about fuel demand. Brent futures rose 74 cents, or 1.9%, to settle at $39.71 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 85 cents, or 2.3%, to settle at $37.66. The oil price moves came ahead of data expected to show U.S. crude stockpiles rose 900,000 barrels last week after gaining 4.3 million barrels in the prior week. The American Petroleum Institute (API), an industry group, will release its inventory report later Tuesday, ahead of government data from the U.S. Energy Information Administration (EIA) on Wednesday. “The election is dominating markets today. Crude oil is up … The general feeling seems to be that the final outcome could come as early as tomorrow,” said Robert Yawger, director of energy futures at Mizuho in New York, noting a Democratic sweep could lead to a super-sized stimulus package that would be positive for oil. Major U.S. stock market indices traded higher, with the S&P 500 up 1.8%. The U.S. dollar, meanwhile, dipped 0.6% against a basket of currencies .DXY as risk appetite grew on bets that Biden will win A weaker dollar makes oil cheaper for holders of other currencies, which traders said was helping to boost crude prices.
Oil Prices Soar On Major Crude Draw -The American Petroleum Institute (API) reported on Tuesday a major draw in crude oil inventories of 8.01 million barrels for the week ending October 30.Analysts had predicted an inventory build of 890,000 barrels.In the previous week, the API reported a surprise build in oil inventories of 4.577-million barrels, after analysts had predicted a draw of 1.11 million barrels.Oil prices were trading up on Tuesday afternoon before the API’s data release in the runup to the U.S. election. Bearish factors this week include a ramp-up of oil production in OPEC producer Libya, the resolution to the latest storm that has disrupted oil and gas production on the U.S. Gulf Coast over the last week, and additional lockdowns in Europe.In the runup to Tuesday’s data release, at 2:07 p.m. EDT, WTI had risen by $0.97 (+2.64%) to $37.77, down roughly $2 per barrel on the week. The Brent crude benchmark had risen on the day by $0.89 at that time (+2.28%) to $39.86 – down roughly $1.50 on the week.Oil production in the United States rose last week, closing the gap between production this week and the all-time high this year down to 2.0 million barrels per day. U.S. oil production currently sits at 11.1 million bpd, according to the Energy Information Administration.The API reported a surprise build in gasoline inventories of 2.45-million barrels of gasoline for the week ending October 27 – compared to the previous week’s 2.252-million-barrel build. Analysts had expected an 871,000-barrel draw for the week.Distillate inventories were down by 577,000 barrels for the week, compared to last week’s 5.333-million-barrel draw, while Cushing inventories rose by 981,000 barrels.At 4:54 pm EDT, the WTI benchmark was trading at $38.10 while Brent crude was trading at $40.11.
WTI Holds Gains After Big Crude Draw, Gasoline Demand Slides — After some notable volatility overnight, oil prices are higher ahead of this morning’s official inventory data as OPEC+ talks on delaying a January oil-output increase gathered momentum. This week’s inventory and production data will be heavily influenced by Hurricane Zeta which caused the shut-in of around 85% of Gulf crude production. API:
- Crude -8.01mm (-600k exp)
- Cushing +981k
- Gasoline +2.45mm (-1.1mm exp)
- Distillates -577k (-2.4mm exp)
DOE
- Crude -7.998mm (-600k exp)
- Cushing +936k
- Gasoline +1.541mm (-1.1mm exp)
- Distillates -1.584mm (-2.4mm exp)
After last week’s surprise build and API’s surprise draw, analysts expected a modest draw in official crude stocks, but instead got a 8mm barrel draw (same as API) – the most since August… Source: Bloomberg Gasoline supplied (implied demand) seems to be stubbornly stuck around 10% below average, and mobility data is not showing any signs of improvement. Bloomberg Intelligence Senior Energy Analyst Vince Piazza:Storms coming through the Gulf of Mexico — temporarily crimping volume and flows — can offer intermittent aid for balances amid rising concerns about demand weakness and a tenuous economic backdrop. Oil production is recovering to above 11 million barrels a day due to a rebound in completion crews, while a crude-export increase may be temporary and storage levels could actually be rising, with Cushing about 79% full.Given Hurricane Zeta’s impact, last week’s production data is likely to be fnorked as it dropped 600k b/d…
Oil climbs as U.S. stockpiles shrink, but election uncertainty overshadows market – Oil prices rose around 2% on Wednesday after industry data showed crude inventories in the United States fell sharply, but trading was choppy as the outcome of the U.S. presidential election remained unclear. West Texas Intermediate was up 90 cents, or 2.4%, at $38.57 a barrel, after trading in a nearly $1 range. Brent crude was up 98 cents, or 2.5%, at $40.69, after trading between $39.85 and $40.70. Oil prices fell more than 10% last week as global coronavirus cases soared and more restrictions on movement hit demand prospects. U.S. oil has nearly recouped those losses in three days of gains this week in the run-up to the election. “People with active positions in the market are trading very very nimbly because the (election) backdrop is a little uncertain,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore. Prices in the hours and days ahead are “going to be more financial-flow driven rather than fundamentally driven,” he added. U.S. crude oil stocks fell sharply last week while gasoline inventories rose, data from industry group the American Petroleum Institute showed on Tuesday. Crude stockpiles fell by 8 million barrels last week to about 487 million barrels, the American Petroleum Institute showed on Tuesday. That contrasted with analysts’ expectations in a Reuters poll for an increase of 890,000 barrels. More lockdowns could put a cap on oil price gains as Italy, Norway and Hungary tightened Covid-19 restrictions, following the UK, France and other countries. “Politics aside, there are European demand uncertainties given the broader extensions of lockdowns,” Chauhan said, though he noted that in Asia demand for oil and its products is returning. Supporting prices, OPEC member Algeria backed deferring a planned increase in OPEC+ oil output from January and Russia’s energy minister raised the prospect with the country’s oil producers.
Oil rises 4% after Trump falsely claims victory in tight U.S. election (Reuters) – Oil prices rose nearly 4% on Wednesday after President Donald Trump falsely claimed victory in a tight U.S. election with millions of votes still to be counted and after data showed a large decline in U.S. crude inventories.A victory by Trump is viewed as bullish for oil because of sanctions on Iran and his support for Saudi-led oil production cuts to support prices. A contested result and prolonged uncertainty is seen as the most bearish outcome for oil and markets in general, while a win for Joe Biden would be seen as bearish to neutral because of his support for green policies and softer stance on Iran. West Texas Intermediate CLc1 ended the session up $1.49, or 4%, at $39.15 a barrel, while Brent crude LCOc1 settled up $1.52, or 3.8%, at $41.23 a barrel. Both benchmarks extended gains to session highs after data showed U.S. crude inventories fell 8 million barrels last week as Hurricane Zeta forced production declines in the Gulf of Mexico during the period. U.S. weekly crude oil exports fell by 1.2 million barrels per day (bpd) to about 2.3 million bpd last week, the biggest drop since January, and production dropped 600,000 bpd to 10.5 million bpd. Trump falsely claimed to have won after his Democratic challenger Biden said he was confident of winning a contest that will not be resolved until a handful of states finish vote counts in the next hours or days. “Perhaps the biggest conclusion to be drawn at this stage is that there is only a small likelihood that existing oil & gas tax incentives will be removed in the U.S. – even if Biden emerges as the winner – given the narrow margin of victory and a probable Republic majority in the U.S. Senate,” said Artem Abramov, head of shale Research at Rystad Energy.
Oil drops as U.S. election uncertainty dominates markets – Oil prices fell on Thursday as Democrat Joe Biden edged closer to the White House in a nail-biting U.S. presidential election, though doubts remain over further huge stimulus to bolster the ecomony in the face of the coronavirus crisis. Brent crude fell 20 cents, or 0.4%, to $41.03 a barrel and U.S. West Texas Intermediate (WTI) crude was down 30 cents, or 0.7%, at $38.85. Both contracts had jumped about 4% on Wednesday. Biden predicted victory over President Donald Trump after winning two critical U.S. states while the Republican incumbent alleged fraud, filed lawsuits and demanded recounts in a bitter contest that has yet to be decided. A drawn-out court battle over the results could cause additional uncertainty in the market, spawning further sell-offs within risky asset classes. “A Trump win will likely to be bullish for oil, at least more bullish than under a Biden administration,” said Tamas Varga at oil brokerage PVM. “Joe Biden will rejoin (the Paris climate agreement). He would also soften the U.S. stance on Iran, consequently global oil supply could rise.” Current vote counting and trends suggest the Republicans are poised to retain control of the U.S. Senate, while the Democrats will hold a slimmed majority in the House of Representatives. A divided Congress could hamper Biden’s plans on climate change, economic stimulus and the easing of sanctions on oil producer Iran. Oil prices had surged on Wednesday on growing expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC+, would hold off on bringing back 2 million bpd of supply in January, given demand has been sapped by new COVID-19 lockdowns. “The volatility in oil will remain because of its sensitivity to the U.S. dollar,”
Oil falls amid European lockdowns, U.S. election uncertainty (Reuters) – Oil prices fell nearly 1% on Thursday, weighed down by the steady rise in coronavirus infections and as the outcome of the U.S. presidential election had still not been settled. Brent crude settled down 30 cents, or 0.7%, at $40.93 a barrel and U.S. West Texas Intermediate (WTI) crude CLc1 was down 36 cents, or 0.9%, at $38.79. Both contracts jumped about 4% on Wednesday. The European Union’s executive commission lowered its economic forecast, adding that said the economy would not rebound to pre-virus levels until 2023. “Despite some surprisingly bullish crude data this week, the oil market will still need to contend with major demand uncertainties related to COVID-19,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, referring to a 8 million-barrel draw in U.S. crude stockpiles. Italy posted its highest one day of infections on Thursday, while the United States surpassed 100,000 infections in a day last week, a record. The Bank of England increased its bond-buying stimulus as it prepared for economic damage from new coronavirus lockdowns and the looming risk of Brexit. The bank said Britain’s economy was set to shrink a record 11% over the course of 2020 overall. “There’s fatigue from the market on the renewed lockdown and the efforts and the damage to be done to the economy,” said John Kilduff, partner at Again Capital LLC in New York. The lockdowns in Europe will remove 1.5 million barrels per day of demand, Kilduff added.
Oil falls 4% as U.S. vote count continues, coronavirus cases rise (Reuters) – Oil settled below $40 a barrel on Friday as rising global coronavirus cases stoked fears about lackluster demand and as drawn-out vote counting in the U.S. presidential election kept markets on edge. France reported record cases, intensifying concerns that additional lockdowns in Europe could weigh on demand. In the U.S. election, Democratic presidential candidate Joe Biden took the lead over President Donald Trump in Georgia and Pennsylvania, edging closer to winning the White House as a handful of states continue to count votes. Three days after polls closed, Biden has a 253 to 214 lead in the state-by-state Electoral College vote that determines the winner, according to Edison Research. Winning Pennsylvania’s 20 electoral votes would put the former vice president over the 270 he needs to win. Brent crude settled down $1.48, or 3.62%, at $39.45 a barrel. U.S. West Texas Intermediate (WTI) CLc1 dropped $1.65, or 4.25% to $37.14 a barrel. Still, both contracts gained on the week with Brent up 5.8%, and U.S. crude rising 4.3%. Diminishing prospects of a large U.S. stimulus package were also weighing on the market. U.S. Senate Majority Leader Mitch McConnell said on Friday that economic statistics including a 1 percentage point drop in the U.S. unemployment rate showed that Congress should enact a smaller coronavirus stimulus package that is highly targeted at the effects of the pandemic. “Crude oil is very sensitive to the stimulus expectations, which just took a hit for the worse,” said Bob Yawger, director of energy futures at Mizuho. “The coronavirus situation is as negative a demand indicator as you can get,” he said.
Oil Prices Stumble Friday But Up for the Week – — Oil pared its weekly gain as a resurgent pandemic raised the risk of further demand destruction, while the market awaits the outcome of a tightly contested U.S. election. Futures in New York dropped 4.3% on Friday, the largest one-day decline in more than a week. Increasing expectations over OPEC+ delaying its planned output increase in January and a post-election rally in equities helped crude prices with a strong start to the week. But a string of renewed lockdowns in Europe and record case counts in the U.S. kept any upward price momentum in check. Conflicting themes have emerged over what the prospect of a divided government means for the oil market with Democrat Joe Biden appearing to be on the brink of victory in the U.S. presidential race. A split Congress reduces the likelihood of President Donald Trump’s tax cuts being rolled back under a Biden presidency, but also means any virus aid package may be thin and only come after a drawn out negotiation process. “The explosion in Covid-19 is a serious demand destruction event” for oil, Bob Yawger, head of the futures division at Mizuho Securities, said in a note. “Crude oil is looking exhausted and may be vulnerable to a pullback.” The new surge in coronavirus cases has presented a fresh threat to oil’s fragile demand recovery, with governments rethinking reopening plans to curb the spread of Covid-19. Meanwhile, the decision by Royal Dutch Shell Plc to shut its Convent refinery in south Louisiana as it continues to seek a buyer adds to a string of refinery closures in the wake of anemic demand. “Sentiment around oil is not very good right now,” said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis. “There are worries about oversupply and under demand, and the surge in the virus count both in the United States and Europe is raising concerns.” Prices West Texas Intermediate for December delivery fell $1.65 to end the session at $37.14 a barrel. The benchmark rose 3.8% over the week Brent for January settlement lost $1.48 to end the session at $39.45 a barrel. The benchmark gained 5.3% this week Biden is nearing victory after taking the lead in Pennsylvania over Trump, with expectations that a new administration could attempt to impact a variety of U.S. energy policy areas, such as fracking and relations with Iran. Still, uncertainty lingers as Trump’s campaign promises legal challenges that could draw out results, though its lawsuits to challenge the count have gained little traction. Meanwhile, as the market continues to wrestle with abundant stockpiles amid a pandemic-induced demand slump, the world’s largest independent provider of oil storage said it has no space for hire at key fuel trading locations. Royal Vopak NV’s total occupancy rate was the highest its been for any three-month period since the start of 2019.
Aramco’s Q3 Profit Slumps 45%. -Aramco reported a net profit of $11.8 billion for the third quarter of 2020, down by 44.6 percent on the year as low oil prices continued to bite into its financial performance.The company also said it had free cash flow of $12.4 billion at the end of the three-month period and declared a dividend of $18.75 billion for the quarter.For the first nine months of the year, the hit from low oil prices and depressed demand was stronger. Net profit was down by close to 49 percent to $35.015 billion.In oil production, the Saudi major reported an average daily of 9.2 million bpd for the first nine months of the year as it continued capping output in compliance with the OPEC+ agreement.Earlier this year, Aramco declared an annual dividend of $75 billion. That amount, however, will not be sufficient to cover the Saudi budget deficit, Moody’s said in a report last month. Now, with oil prices still low and likely to go lower still if the surge in Covid-19 cases continues in Europe and the United States, Aramco’s earnings will take a bigger hit.This means that the government in Riyadh will not be able to plug the budget hole with the Aramco dividend as it has done previously.“The government is unlikely to be able to repeat the maneuver beyond 2021,” Moody’s said in the report. Aramco will have its own capital expenditure needs and its commitment to buy petrochemicals giant SABIC to look after, according to the ratings agency.Despite the challenging environment, Aramco expects that oil supply will tighten over the next year as demand recovers to pre-pandemic levels. China is seen as the source of most of the rebound, supported by other Asian countries.For the immediate future, however, Aramco is much less bullish. The company saidlast week that oil demand was currently too weak for OPEC+ to go ahead with its plan to relax production cuts by another 2 million bpd from next January
Saudi Aramco’s net profit drops 45% in the third quarter on weak oil demand – Saudi Aramco’s net profit fell 44.6% in the third quarter of 2020 compared to the same period last year, reflecting continued damage to oil demand and prices from the global coronavirus pandemic. Net profit dropped to 44.21 billion riyals ($11.8 billion) this quarter from 79.84 billion riyals in the third quarter of 2019. The figure is in line with analyst estimates, revealing a recovery from the historic revenue drop in the second quarter that saw profits plummet to 24.75 billion riyals. The Saudi kingdom’s state oil company saw lower crude oil prices and volumes sold, as well as weaker refining and chemicals margins, the company said in its release Tuesday. It also saw a decrease in oil production royalties, a drop in the royalty rate from 20% to 15%, and lower income taxes and zakat (Islamic taxes). The national producer has maintained its third-quarter dividend of $18.75 billion, to be paid in the fourth quarter. Its second-quarter dividend was declared at the same level in August, also to be paid in the following quarter. Aramco’s first quarter dividend was paid in the second quarter. Aramco listed 1.5% of its shares locally on the Saudi Tadawul last year, which analysts say has reshaped many of the company’s priorities, including that of its commitment to shareholders. “Aramco has made this very strong dividend commitment to shareholders as part of the IPO,” Neil Beveridge, a senior oil and gas analyst at Bernstein, told CNBC’s “Capital Connection” on Tuesday. “And that really was a cornerstone promise I think, for any investor that was investing in Saudi Aramco and that’s something that … the company will want to sustain, along the lines that they committed to in the IPO.” Aramco’s stock price on the Saudi Tadawul was up just under 1% at 34.50 riyals per share within an hour of the exchange’s open. Brent crude was trading at $39.55 per barrel, having dropped dramatically at the start of this week as several European countries return to lockdowns amid soaring coronavirus cases. The international oil benchmark is down more than 36% year-to-date.
How Kurdistan Is Taking Advantage Of Iraq’s Oil Crisis – Iraq is facing a desperate financial situation: obliged to pay billions of dollars in state salaries, pensions, and other disbursements whilst its ability to generate revenue to do so is severely constrained by a low oil price environment and OPEC+-mandated production quotas. Making matters worse is that the government of the semi-autonomous Kurdistan region in the north – the KRG – is using Baghdad’s deteriorating financial position to advance its own agenda and, by extension, the agenda of its principal state-sponsor, Russia.Baghdad had little choice earlier this year but to overshoot its OPEC+ crude oil production quotas, given that by the middle of the year its oil revenues had fallen by nearly 50 per cent, while the government still derives 90 per cent of its revenues come from crude oil sales. At the same time, the then-new Prime Minister, Mustafa al-Kadhimi, needed IQD12 trillion (US$10 billion) just to pay the next two months salaries of more than four million employees, retirees, state beneficiaries, and the food relief for low-income families. It was believed in Iraqi government circles that any failure to pay any of these obligations could result in the sort of widespread protests that occurred at the end of last year.The problem for Baghdad is that these payments are regular ones, the price of oil has not improved, and it was already quietly censured by OPEC+ for breaking its quota. Given Iraq’s unusually high level of economic dependence on crude oil sales, the IMF recently stated that it expects the country to see a 12.1 per cent drop in its GDP for 2020. These factors also mean that any opportunity that Iraq has to raise money in the international capital markets will come at a preclusively high price, with yields on its dollar-denominated bonds having risen to more than 10 per cent, the highest in the region. To ease the burden of adhering to the OPEC+-mandated production quotas, Baghdad had been looking to the KRG, based in Erbil, to make cuts from its own output in the semi-autonomous region. In response, the KRG last week made it clear that it would consider doing so only on two conditions. The first is that the Federal Government of Iraq (FGI) in Baghdad pays what the KRG says it owes by dint of the long-standing ‘oil-for-budget payments deal’. The second is that this is augmented by further money that compensates the KRG for the loss of revenue from not producing the output that it was previously producing. In other words, not only would Baghdad lose revenues from not producing to its own full capacity in the south but it would have to spend more of these vastly reduced revenues on paying the north not to produce to capacity as well.
US sells oil seized from Iran to Venezuela for $40 million – The United States said Thursday that it had sold Iranian oil seized on its way to Venezuela for more than $40 million. Washington announced in August that it had confiscated 1.1 million barrels of petroleum from four tankers en route between the two countries, which are both under US sanctions. “We estimate that in excess of $40 million will be recouped by the United States related to the sale of petroleum from those four vessels,” Michael Sherwin, the acting US attorney for the District of Columbia, told reporters by telephone. He said a “great portion” of it would be contributed to a US fund for victims of “state-sponsored terrorism.” US courts have ordered Iran’s clerical regime to pay damages over attacks, most recently in July when a judge told Tehran to pay $879.1 million over a 1996 bombing in Saudi Arabia that killed 19 US airmen. Iran denies responsibility and states it has no intention of paying, saying the United States should instead compensate for past episodes including its support of Saddam Hussein in the Iran-Iraq War. Venezuela has the world’s largest oil reserves but its economy and infrastructure have collapsed to the point that it suffers blackouts and needs help from Iran, which it pays in gold. President Donald Trump has been seeking to weaken Iran regionally and to remove Venezuela’s leftist leader Nicolas Maduro, who shows little sign of leaving soon. Trump in 2018 walked away from a deal brokered by former president Barack Obama under which Iran scaled back its nuclear program drastically in return for sanctions relief.
Israeli Minister Warns Of War In Middle East If Biden Wins – Israeli Settlements Minister Tzachi Hanegbi warns that a Biden presidency could ignite war in the Middle East, while Egypt fears Biden would aid the resurgence of Islamists in the region. Hanegbi pointed out that Biden has indicated he will resurrect America’s nuclear agreement with Iran which was cancelled by the Trump administration. For Israel, this would represent an existential threat to national security and drastically increase the chances of war with Tehran. “If Biden stays with that policy, there will, in the end, be a violent confrontation between Israel and Iran,” said Hanegbi. Meanwhile, other Middle Eastern countries such as Egypt are concerned that a Biden administration would mirror Barack Obama’s policies, which led to Islamists being empowered in the region. Obama spearheaded the disastrous interventions in Syria and Libya which led to the rise of ISIS and the international migrant crisis. Obama also suspended aid to Egypt after popular protests ousted Islamist President Muhammad Morsi in 2013. “Egyptians are likely to be concerned about a revival of Obama’s democracy agenda which meant actively encouraging political participation of Islamists,” reports Arab Weekly. So in other words, if Biden wins, Americans have at least four more years of disastrous foreign interventions to look forward to.
Israel rebuked for ‘biggest demolition of Palestinian homes in years’ – BBC News – The United Nations has rebuked Israel for carrying out what it said was the biggest demolition of Palestinian homes in the occupied West Bank for a decade. Some 73 people, including 41 children, were made homeless when their dwellings were knocked down in the Bedouin settlement of Khirbet Humsa, in the Jordan Valley, the UN said. The Israeli military said the structures had been built illegally. But the UN called the Israeli actions a “grave breach” of international law. According to the UN Office for the Co-ordination of Humanitarian Affairs (Ocha), 76 structures – including homes, animal shelters, toilets and solar panels – were destroyed when Israeli bulldozers moved in late on Tuesday. Israeli authorities put the figure considerably lower, saying an “enforcement activity” had been carried out involving seven tents and eight animal pens. Footage from the scene following the demolition, released by Israeli human rights group B’Tselem, showed the area strewn with wreckage including twisted metal, sheets and cots. “This is a great injustice,” resident Harb Abu al-Kabash told the Israeli newspaper Haaretz. “We didn’t know they were coming and we didn’t prepare, and now we are facing rain.” In a statement, the Israeli military body responsible for civilian affairs in the West Bank said the destroyed structures had been “built illegally in a firing zone”, or military training area. Ocha said Khirbet Humsa, known as Humsa al-Bqaiaa in Arabic, was one of 38 communities fully or partially located within Israeli-designated “firing zones” and which constitute “some of the most vulnerable communities in the West Bank”. It said such demolitions were “grave breaches of the Fourth Geneva Convention” – international law designed to protect civilian populations in occupied territories. Israel occupied the West Bank in the 1967 Middle East war. Under subsequent agreements, Palestinians exercise limited self-rule in parts of the West Bank, while Israel has overall control. Khirbet Humsa lies in an area outside of Palestinian control.
French airstrikes kill over 50 Qaeda-linked jihadists in Mali – The French government said Monday its forces had killed more than 50 jihadists aligned to Al-Qaeda in air strikes in central Mali. The offensive took place on Friday in an area near the borders of Burkina Faso and Niger, where government troops are struggling to rout an Islamic insurgency, French Defence Minister Florence Parly said after meeting members of Mali’s transitional government. “On October 30 in Mali, the Barkhane force conducted an operation that neutralised more than 50 jihadists and confiscated arms and material,” Parly said, referring to the French-led anti-jihadist Operation Barkhane. She added that around 30 motorcycles were destroyed. Parly, who earlier met Niger President Mahamadou Issoufou and her Nigerien counterpart Issoufou Katambe before heading to Bamako, said the operation was launched after a drone detected a “very large” motorcycle caravan in the “three borders” area. When the jihadists moved under trees to try and escape surveillance, the French force sent in two Mirage jets and a drone to launch missiles, leading to the “neutralisation” of the insurgents, Parly said. Military spokesman Colonel Frederic Barbry said that “four terrorists have been captured”. Explosives and a suicide vest had been found, he told a reporters in a conference call, saying that the group had been “about to attack (an army) position in the region”. Barbry also said that another operation, this time targeting the Islamic State in the Greater Sahara, was also underway, with a total of 3,000 soldiers. The results of the operation, launched about a month ago, would be announced in the coming days, he said. Parly said the action marked a “significant blow” to the Ansarul Islam group which she said was linked to Al-Qaeda via the GSIM alliance led by Iyad Ag Ghaly. Ghaly has emerged as a top jihadist leader in the Sahel since the death of the Qaeda commander Abdelmalek Droukdel, who was killed by French forces in Mali in June.
Ukraine, Turkey deepen military alliance in Black Sea region – Ukraine and Turkey have moved further this past month to strengthen a rapidly growing military alliance that is aimed at cornering Russia out of the Black Sea region. Meeting in Istanbul on October 16, Turkish President Recep Tayyip Erdogan and Ukrainian President Volodomyr Zelensky publicly posed for photos while they happily signed a “goodwill” agreement between the two countries’ defense industries as well as a “military framework” agreement. Details of the agreements are not publicly known. However, it was widely reported that the deals will involve large-scale technology transfer that will aid both countries in confronting Russia in any potential war. Following the signing of the agreement, Erdogan made clear that Ukraine was quickly becoming a significant ally of Turkey in the region, stating, “Turkey sees Ukraine as a key country for the establishment (of) stability, security, peace and prosperity in the region.” The agreement is a sign of an increasingly complicated and intertwined system of military alliances in the region which threaten the world with the outbreak of a major world war. Ever since the dissolution of the Soviet Union by the Stalinist bureaucracy in 1991, the Black Sea region has become a focal point of the efforts of US imperialism to establish full control over the resources of the vast landmass that had previously been controlled by the USSR, and to encircle Russia. With the exception of Russia itself, every state bordering the Black Sea has been turned into a member of NATO or is working closely with the alliance. The meeting between Zelensky and Erdogan occurred amid the ongoing war between a Russian-backed Armenia and a Turkish-backed Azerbaijan over the Armenian-controlled Nagorno-Karabakh enclave. Moreover, Turkey has been engaged in an increasingly heated conflict with fellow NATO member Greece over territorial and energy rights in the Aegean Sea in the Eastern Mediterranean, which is connected to the Black Sea through the Sea of Marmara. In the civil wars in Libya and Syria, Russia and Turkey are backing opposing sides. In his remarks, Erdogan explicitly took Kiev’s side against Moscow in the conflict over Crimea, a peninsula in the Black Sea. He bluntly stated, “Turkey has not recognized Crimea’s illegal annexation and it never will.” The peninsula was annexed by Russia in 2014 following a right-wing United States-backed coup that threatened to completely cut Russia’s naval forces out of the Black Sea. Crimea, which was previously a vassal state of the Ottoman Empire prior to being annexed by the Russian Empire under Catherine the Great in 1783, is home to a population of approximately 250,000 Crimean Tatars who share linguistic and cultural ties with Turks. In 2016, Erdogan made clear that he views Crimea as part of a “Greater Turkey,” stating, “Turkey cannot disregard its kinsmen in Western Thrace, Cyprus, Crimea and anywhere else.” The public summit in Ankara is the culmination of growing economic and military ties between the two countries, which have grown rapidly since the election of President Volodomyr Zelensky in April 2019.
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