Wood Group PSN (WGPSN) will continue its work on an offshore Canadian platform in a multi-million dollar deal. The company has been awarded a five-year contract extension for its engineering, procurement and construction services to the Hibernia platform. Hibernia Management and Development Company Ltd (HMDC) awarded the contract for work on the platform, which is in offshore Newfoundland and Labrador.
US investors remained in a record-setting mood, edging the Dow Jones industrial average and Standard & Poor’s 500 index to their latest all-time highs.
West Texas Intermediate and Brent crude traded near the lowest price in four years amid speculation that OPEC will resist production cuts sought by some of its smaller members. Futures fell as much as 0.8 percent in New York. Ecuador and Venezuela will ask members of the Organization of Petroleum Exporting Countries to reduce excess output, an Ecuador official said. Saudi Arabia is probably trimming exports amid a recovery in Libyan supply, according to Barclays Plc. The U.S. Senate refused to approve the proposed Keystone XL pipeline that would carry Canadian crude to the Gulf Coast.
Major US indexes managed to close marginally higher, setting another high for the Standard & Poor’s 500 index. Energy stocks fell as the price of crude oil resumed its slide.
Wentworth Resources Limited has secured $26million in loan agreements from the Tanzanian Bank for the development of a well and loan repayments. The company said it had also signed a long-term gas sales and purchase agreement to supply discovered natural gas at a price of $3 per mmbtu (million metric British thermal units) for its Mnazi Bay concession. In its third quarter results the company said its working capital was down to $24million compared with $38.4million for the same time last year.
An off-market takeover bid for Roc Oil by Fosun has now closed. Billionaire Guo Guangchang’s Fosun International agreed to acquire Roc Oil for $441million in cash, giving the Chinese group assets stretching from Australia to Malaysia.
London’s FTSE 100 Index was 19.3 points lower at 6615.6 as lower commodity prices pulled top flight mining and oil stocks into negative territory.
Technip has been awarded a contract for project management consultancy services for the Nasr Phase II full field development project by Abu Dhabi Marine Operating Company (ADMA-OPCO). The Nasr Field is being developed to secure an annual average production of 65kb/d of crude oil by using offshore process facilities, wellheads, pipelines and facilities on Das Island. The contract is the second win for the company this week after it was awarded a subsea contract for the K2 field in the Gulf of Mexico.
Halliburton is in talks to buy Baker Hughes Inc in a deal that would combine two of the largest and oldest names in the energy business as plunging oil prices send the industry into a downturn. By eliminating a competitor, Halliburton, already the world’s second-biggest provider of oilfield services, would gain market clout that would help insulate it from a sustained market decline. A combination of Halliburton with No. 3 Baker Hughes would be a little more than half the size of larger rival Schlumberger Ltd.
Iraq’s president and Libya’s prime minister flew to Riyadh as Saudi Arabian Oil Minister Ali Al- Naimi tours Latin America ahead of an OPEC meeting in Vienna to discuss the fall in oil prices. Libyan Prime Minister Abdullah al-Thani arrived in Saudi Arabia just as Iraqi President Fouad Masoum left the kingdom after a two-day visit where he met with King Abdullah, according to the official Saudi Press Agency.
Oil prices have dipped below 80 US dollars a barrel for the first time in four years, boosting hopes for cheaper petrol on UK forecourts. The price of Brent crude for December delivery fell as low as 79 US dollars a barrel after industry cartel Opec yesterday predicted that demand for its oil will be slightly lower next year at 29.2 million barrels a day. The world’s uncertain growth outlook, with the eurozone stagnant and Chinese expansion showing signs of easing, has fuelled fears that there will be a glut of oil swilling around the global economy.
Premier Oil has downsized its spending on the Sea Lion development in the Falkland Islands, the company has announced. The project had originally been earmarked for spending of more than £3billion. However in its interim statement, the company said following a project review, the Sea Lion would now progress to a “smaller development” with an estimated spending of less than £2billion.
Tullow Oil said it will focus the majority of its exploration and appraisal expenditure in its East and West African assets. The company released an interim management statement which said it was looking to re-allocate capital as a result of recent oil prices and reduced commercial success from offshore drilling. The TEN development project, Jubilee production and the non-operated West Africa portfolio is expected to generate “significant value”, attracting the greatest share capital in 2015.
Brent crude fell for a third day amid signs that OPEC members are reluctant to reduce supply even as prices slumped deeper into a bear market. West Texas Intermediate dropped in New York. Futures slid as much as 1% in London. The oversupply in global markets “didn’t come from us,” Energy Minister Suhail Al Mazrouei said yesterday of the United Arab Emirates and the Organization of Petroleum Exporting Countries. Crude stockpiles in the US, the world’s biggest oil consumer, probably increased by 1.1 million barrels through Nov. 7 for a sixth weekly gain, a Bloomberg News survey shows before government data tomorrow.
Oil at $80 a barrel won’t stop BP Plc or Total SA from exploring and developing crude deposits. Oil has dropped into a bear market this year, with prices falling almost 30 percent since June amid a global glut. OPEC won’t cut its collective output when it meets this month and global oil prices will stabilize once the surplus is absorbed, Kuwait Oil Minister Ali Al-Omair said at an oil conference in Abu Dhabi, the capital of United Arab Emirates, yesterday. All projects under way now will go ahead with oil at $80 a barrel, London-based BP Chief Executive Officer Robert Dudley said at the conference. Total, based in Paris, can proceeed with its projects at $80, Arnaud Breuillac, president of exploration and production, also said in Abu Dhabi. Brent crude, benchmark for more than half of the world’s oil, fell 0.5 percent today to $81.97 a barrel on ICE Futures Europe in London, extending this year’s retreat to 26 percent. “We have only sanctioned or approved projects based on an $80 oil price,” Dudley said. “We’ve been doing that three or four years so there isn’t any project that we’re working on today, particularly those big capital projects, that we have any different view of.”
An investment bank has slashed its forecast for the price of Brent crude next year and has warned prices could hit as low as $65 a barrel in January if the Organization of the Petroleum Exporting Countries (OPEC) doesn't scale down production. JPMorgan Chase & Co has become the most bearish bank on Wall Street after it downgraded its 2015 Brent price forecast by $33 to $82 per barrel, citing supply pressures in the Atlantic Basin and an apparent inability of OPEC member states to work cohesively to restrain production and rebalance the market. The investment bank also lowered its 2016 Brent price forecast to $87.80 per barrel from $120, in a research note dated November 7.
Natural gas futures climbed for a 10th day in New York, the longest streak of gains in 14 years, as forecasts showed arctic air sweeping the U.S., boosting demand for heating fuels. Frigid weather will move into the Great Plains and Midwest over the next 10 days as below-normal temperatures blanket states east of the Rocky Mountains, said Commodity Weather Group LLC. The low in Minneapolis on Nov. 14 will be 2 degrees Fahrenheit (minus 17 Celsius), 25 below normal, AccuWeather Inc. said on its website. “This next polar vortex is hitting hard and is expected to persist for several days,” said Scott Hanold, energy analyst at RBC Capital Markets in Minneapolis. “It’s a cold start to winter and people are engaged again.”
Brent crude rose for the third time in four days as Chinese export data signaled foreign demand may help sustain the economy in the world’s second-biggest oil consumer. West Texas Intermediate gained in New York. Futures climbed as much as 0.7 percent in London. Overseas shipments increased 11.6 percent from a year earlier, according to Chinese customs data on Nov. 8, exceeding the 10.6 percent median estimate in a Bloomberg News survey. The number of rigs drilling for oil in the U.S. last week shrank to the lowest since August, Baker Hughes Inc. said last week.
Songa Offshore have announced a loss of $6.4million in its third quarter statement. The company’s profit was $1.1million during the same period which it said had been affected by the lower revenue contribution from the sale of the Songa Venus and Songa Mercur rigs. Last month, the company cut its financial liabilities in relation to its Song Venus bareboat charter agreement.
With less than three weeks to go before OPEC meets in Vienna and the selloff in oil showing few signs of letting up, speculation is mounting the group will take action to try to stem the decline. Here’s how four analysts across Europe and the U.S. see the Nov. 27 meeting playing out. Giovanni Staunovo, an analyst at UBS AG in Zurich, is predicting the Organization of Petroleum Exporting Countries will reduce output 500,000 barrels a day at the meeting. Such a move would help trigger a rebound in crude to a range of $90 to $100 a barrel, the analyst estimated. Crude futures in London dropped again yesterday, bringing the total decline to 28 percent from a June peak, as OPEC acknowledged the world will need less of its oil for most of the next two decades than previously estimated as U.S. shale production grows. Brent crude, the benchmark for more than half of the world’s oil, has slipped to $82.86 a barrel as of the close yesterday, from a high of $115.06 in June on the London-based ICE Futures Europe exchange.
The slump in oil prices is a boon to China as the world’s second-biggest oil consumer. It’s a different story for the country as a major producer. The slide in prices to a four-year low threatens to cut spending, production and profit for the country’s oil companies including PetroChina Co (857) Brent, the global benchmark, has fallen 26% this year to below $83 a barrel. The decline, amid signs that global supply is outpacing demand, is pressuring profits from oil extraction across the globe. After a flurry of acquisitions and spending that’s stretched the balance sheets of Chinese oil companies, the country will also have a diminished appetite for deals, according to Sanford C Bernstein & Co.
Petrol firms and supermarkets will be pressed by the Government to pass on the benefit of falling oil prices to customers filling up at the pumps. Treasury Chief Secretary Danny Alexander will demand an assurance from fuel companies and distributors that they are doing all they can to pass on the price cuts to motorists. Mr Alexander will use a speech in Aberdeen to warn people would "rightly be angry" if they felt prices were not coming down as much as they should.
Interest rates are expected to remain on hold tomorrow as the recent fall in oil prices eases pressure on the Bank of England for an imminent hike. The Bank rate has been left at 0.5% for more than five years but expectations of an upward move have dwindled in recent weeks due to global economic worries and signs that the housing market is cooling. Despite strong UK growth, the majority of members on the Bank’s monetary policy committee (MPC) are worried that a rise will choke off the recovery at a time when the eurozone is in danger of plunging back into recession. Policymakers will have access to the Bank’s latest quarterly projections but these are likely to show inflation is less of a threat due to falling shop prices and oil market weakness.
Russia’s rouble currency is hitting an all-time low as the country’s economy struggles with the combined blows of western sanctions and a worldwide fall in oil prices. In trading on the MICEX exchange, the rouble dropped to 44.9 to the US dollar late today - about a three per cent fall for the day. The rouble has lost more than 25% of its value this year.
Neon Energy is set to merge with MEO Australia after it became involved in a takeover bid. It is hoped the move will reduce overhead costs of the two companies, from $8.5million to $3.5million per year. The company is expected to form with a net cash income of $37million and a board will be formed of the merged groups, comprising two directors from Neon, and two directors from MEO.