With oil prices still wobbling around $50, Norway is in danger of a recession that could drive its benchmark interest rates, already at a record low, to zero. That’s what economists at Svenska Handelsbanken AB in Oslo say as they warn that “recessionary risks are significant.” The central bank in September cut rates to 0.75 percent and signaled more than a 50 percent chance for a third reduction since the drop in oil prices accelerated, about a year ago. Handelsbanken sees three cuts next year, bringing the benchmark to zero by the end of 2016. “The Norwegian economy will now experience a deeper downturn than during the financial crisis, with output expected to stay below its potential for longer than it did last time,” Kari Due-Andresen and Knut Anton Mork, economists at Handelsbanken, wrote in their latest report.
The Environment Agency is cutting its pension fund investments in fossil fuels to bring it in line with efforts to prevent dangerous climate change. Under the plans the Environment Agency Pension Fund (EAPF) will invest 15% of its £2.7 billion fund in low carbon and energy efficient technology and reduce investment in coal by 90% and oil and gas by half, in terms of carbon emissions, by 2020. The change by the Government agency aims to make sure its investments are compatible with international agreement to keep global temperature rises to 2C - seen as the threshold beyond which dangerous impacts of climate change will occur.
EDF said its hopes to announce a deal with Chinese investors to build a nuclear plant at Hinkley Point in the coming days. The French company’s chief executive Jean Bernard Levy said it was in the final negotiations with its Chinese partners. However he said he did not want to anticipate what would happen later this week as China’s President Xi Jingping to Britain.
A decision by the Norwegian minority government to start making withdrawals from the country’s sovereign fund could mark a “radical change” for the region. Leading expert Professor Jon Kleppe, from the Norwegian University of Science and Technology in Trondheim, said the sovereign fund has risen from NOK 6300billion at the start of the year to NOK 7000billion. He said the increase was largely down to the weakening of the Norwegian Kroner next to the US dollar.
Two energy service firms will share the spoils of a £5million investment by the Scottish Loan Fund (SLF), it was announced yesterday. North Sea well integrity specialists Meta Downhole and Read Cased Hole (RCH) will use the cash to support their international growth ambitions, SLF said. Meta and RCH, both based in Bridge of Don, Aberdeen, are trading companies of Read Well Services Holdings.
Magma Global has raised $60million from strategic investment capital partners and existing investors to support it growth plans. The company said the proceeds of the investment round will be used to the expansion of its manufacturing capabilities and to provide additional working capital to support its rental business.
They long stood in the shadows of state- owned Chinese energy giants, small in size and clustered in an eastern province along the coast. Now, independent refiners are wielding growing clout in the global oil market. Shandong Dongming Petrochemical Group, the biggest of dozens of privately owned refiners known as “teapots,” illustrates how such processors may be coming into their own after for years depending on state-owned companies for oil. It began importing supply on its own this year after hiring two crude traders in Singapore, according to Shen Fan, a deputy general manager at Pacific Commerce Holdings Pte, its trading unit. China is widening access for teapots as part of its drive to encourage private investment in its energy industry. That may boost imports into the world’s second-biggest oil user, helping counter a glut that’s cut benchmark prices by half in the past year. The small plants account for almost a third of the nation’s processing capacity, and if Shandong Dongming is a guide, may attract cargoes from Latin America to West Africa and Australia.
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.”
Take a look at the facts and figures behind BP's bumper $1billion investment in one of its North Sea assets. The oil major has announced the cash injection could add up to 15 years to the project. The money – £670million – will be funnelled into its Eastern Trough Area Project (Etap), securing its future through to 2030.
The boss of MX Oil said the company had secured a share in a “world-class” asset after investing in the OML 113 licence offshore Nigeria. Stefan Olivier said he did not see any challenges from acquiring a 5% share in the near-term producing licence, which includes the Aje Field. The asset has already undergone flow tests with production expected from January 2016.
Private-equity firm Blue Water Energy (BWE), which invests exclusively in the energy industry, is pouring £163million into a new North Sea oil and gas explorer. Sadly for the industry in Scotland, the new firm is based on the other side of the North Sea and will focus only on exploration activity in Norwegian waters through licensing rounds, farm-ins and acquisitions. It has been launched by a diverse and experienced management team, including former Agora and Cairn Energy Norwegian operations manager Callum Smyth and former RIT Capital Partners private-equity specialist Olivier Hopkes.
Aberdeen’s council leader will today call for the UK and Scottish governments to “seize the moment” and back plans for a £2billion investment in the north-east. Jenny Laing will use a North Sea oil summit to argue for a radical transformation of the area through spending on transport, housing and skills development to help secure the long-term future of the industry. The city council administration believes the level of attention currently focused on the energy sector, due to the dramatic fall in the price of Brent Crude, provides a “historic opportunity” for the region.
The UK Treasury has moved the launch of an investment allowance consultation forward after calls were made by the oil and gas industry. The Chief Secretary to the Treasury and Danny Alexander and the Exchequer Secretary made the announcement following a meeting in Edinburgh. The allowance, which was first announced in the Autumn Statement, is a single, basin-wide capital expenditure linked investment allowance.
North-east oil and gas pipeline engineering specialist Stats Group is preparing for further international expansion after securing an additional £4.3million investment from the Business Growth Fund (BGF). Bosses have also invested more cash in the business, which had an initial £7.8million of BGF funding in March 2012. Since the initial deal, the firm has doubled its annual turnover to around £30million, created 145 new jobs and opened operational bases in Canada, the Middle East and US.
The UK oil and gas industry is missing out on a government funding pot worth more than £7billion because it has failed to sufficiently organise itself, a business leader warned yesterday. Paul Warwick, boss of oil operator Talisman and a member of the government and industry-led Technology Leadership Board (TLB), said the sector has missed out on financial support for technology development from the Department for Business, Innovation & Skills (Bis) because it was “too complicated”. He added that, until recently, the industry had not needed the help from government.
The falling oil price has caught-out investors in a retail bond linked to a leading North Sea producer. EnQuest issued the bond two years ago, offering an attractive 5.5% interest rate until 2022. The company used it to raise £155million to help develop the Kraken field off the Shetland Islands.
The Scottish Government said a "cautious approach" should be taken to the announcement by Ineos that it plans to invest £640million in shale and gas exploration in the UK. The move by chemicals giant Ineos could make it the biggest player in the industry in the country. The company already has two licences near its plant at Grangemouth in Scotland but is applying for more in Scotland and the north of England. It plans to use the gas as a raw material for its chemicals plants, including Grangemouth in Stirlingshire.
Energy service firm Enermech will invest £3million in boosting its Norwegian workforce and equipment, the company has announced. The move comes after the company appointed Stian Urke as its sales manager to strengthen the firm's PPU division in Norway. Enermech will boost its employee numbers from 60 to 75 which will include senior positions in both the hydraulics and equipment rental divisions as it expands in both Bergen and Stavanger.
Sir Ian Wood wrote an interesting article recently in which he discussed the window of opportunity for Aberdeen to take advantage of its oil capital status in order to make radical improvements to the city centre. To those of us who are occasional visitors to the city, it has long been an enigma that there is so much wealth in and around Aberdeen yet this is so inconsistently reflected in the face it shows to visitors, at least on first acquaintance.
Carbon copy investment companies found by a court to have misled clients have been ordered into liquidation. Both Carbon Green Capital and Agora Capital were found by the High Court in London to have made false claims about investment returns. A petition against the companies was presented to the High Court by the Secretary for Business, Innovation and Skills, Vince Cable. The companies were accused of selling carbon credit investments which were misleading, raking in almost £1million in profit. Chris Mayhew, Company Investigations Supervisor, said: “This formally brings to an end the activities of two heartless companies that claimed to pride themselves on the investment returns for clients but who in truth were peddling near worthless carbon credits, which in some instances they even failed to supply, raising approaching £1million from the public”. “Far from the claimed world class investment services dedicated to helping clients, these companies were dedicated only to helping themselves. “I would once more urge investors not to respond to cold calling investment sharks as you stand to gain nothing and risk losing everything. Simply end the call, not your savings. “The Insolvency Service will not allow rogue companies to rip-off vulnerable and honest people and will investigate abuses and close down companies if they are found to be operating or about to operate, against the public interest."