Category Archives: Oil

(AJ) Iran seizes British oil tanker in Strait of Hormuz

(AJ) Iran’s Revolutionary Guard Corps says tanker was captured ‘for failing to respect international maritime rules’.

The vessel was seized by 'small crafts and a helicopter', the owner of the vessel said [Stena Bulk/Handout/via Reuters]
The vessel was seized by ‘small crafts and a helicopter’, the owner of the vessel said [Stena Bulk/Handout/via Reuters]

Iran’s Revolutionary Guard Corps (IRGC) said its forces have captured a British oil tanker in the Strait of Hormuz for allegedly violating international laws, amid rising tensions in the Gulf. 

The Stena Impero tanker “was confiscated by the Revolutionary Guards at the request of Hormozgan Ports and Maritime Organisation when passing through the Strait of Hormuz, for failing to respect international maritime rules,” the IRGC’s official website Sepahnews announced.

The tanker “was led to the shore and handed over to the organisation to go through the legal procedure and required investigations,” it said.

The vessel was seized by “small crafts and a helicopter” at 7:30pm local time (15:00GMT), the owner of the vessel, Stena Bulk, and Northern Marine Management said, adding that they are “presently unable to contact the vessel”. 

Tanker tracking service Marine Traffic showed that the UK-flagged, Swedish-owned Stena Impero last signalled its location near the Island of Larak in the highly sensitive waterway at 9pm local time (16:30 GMT).

There are 23 crew members on board, the company’s statement added.

“We are urgently seeking further information and assessing the situation following reports of an incident in the Gulf,” a spokesperson for Britain’s Ministry of Defence said.

Second vessel seized

The British Foreign Office confirmed a second naval vessel, a Liberian-flagged vessel, had been seized in the Strait of Hormuz by Iranian authorities.

Later on Friday, Iran’s semi-official Fars news agency reported that the Liberian-flagged Mesdar tanker was briefly held and given a notice to comply with environmental regulations before being allowed to continue on its way.

“I’m extremely concerned by the seizure of two naval vessels by Iranian authorities in the Strait of Hormuz,” said Foreign Secretary Jeremy Hunt.

“I will shortly attend a COBR (national security) meeting to review what we know and what we can do to swiftly secure the release of the two vessels.

“These seizures are unacceptable. It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region.”

There was no immediate confirmation from Iran that its forces had seized a second vessel. 

Strait of Hormuz

‘Provocative moves’

The developments came a day after the IRGC said it had seized a foreign tanker accused of smuggling oil with a crew of 12 on Sunday.

The Strait of Hormuz in the Gulf, the world’s most important waterways for the transport of oil, has become a hotspot for tensions with Iran amid a spate of incidents there.

Relations between Britain and Iran and the United States and Iran have soured in particular.

Earlier this month, British Royal Marines seized an Iranian oil tanker off the British overseas territory of Gibraltar for allegedly violating sanctions against Syria.

On Friday, Gibraltar’s Supreme Court extended for 30 days the detention of the seized Iranian supertanker, Panama-flagged Grace 1, which was intercepted off the southern tip of Spain on July 4.

Richard Weitz, a security analyst at Wikistrat, a global risk consultancy group, said Friday’s incident was a “reciprocal action” by Iran.

“This was anticipated,” he told Al Jazeera from Washington, DC. “This is just the latest in a series of these subconventional forms of provocative moves.” 

(BI) Russia is joining forces with Europe to rescue the Iran nuclear deal that Trump abandoned

(BI)

putin rouhani russia iran

Russia’s President Vladimir Putin shakes hands with his Iranian counterpart Hassan Rouhani.REUTERS/Mikhail Klimentyev/RIA Novosti/Kremlin

  • The Financial Times reported that Russia has signaled it wants  join an EU payments channel designed to go around Trump’s sanctions on Iran and boost oil exports. 
  • The channel, known as Instex, would be a huge step in rescuing the 2015 Iran nuclear deal which Trump abandoned last year. 
  • Iran has been been in breach of the deal recently by going past levels of uranium enrichment set by the 2015 deal. 
  • View Markets Insider for more stories.

Russia has signaled it wants to team up with the European Union in joining an EU payments channel, avoiding US sanctions banning trade with Iran and boost oil exports, the Financial Times reported. 

The payments channel, Instex, would be a massive step forward in attempts by the EU and Russia in rescuing the 2015 Iran nuclear deal. 

Iran’s President Rouhani and President Trump have in the past year been at loggerheads over the nuclear deal, with Trump abandoning it last May. 

Read More: How the Strait of Hormuz, a narrow stretch of water where ships transport $1.2 billion worth of oil every day, is at the heart of spiraling tensions with Iran

The move by Moscow to work with the EU is also surprising, given the little cooperation between the two parties since Russian annexed Crimea in 2014, attempted murder of a double agent in the UK, and alleged attempts to meddle in EU elections. 

However, it also marks a move by both the EU and Moscow to ignore Trump’s sanctions. Since he pulled out of the deal last May, France, Germany, China, the UK, and Russia all have been trying to maintain trade with Iran, but have been hindered by companies not wanting to risk problems with the White House.

Since then Iran has breached the deal by going above the agreed limit on uranium enrichment levels, out of retaliation for US sanctions on Iran. 

“Russia is interested in close co-ordination with the European Union on Instex,” the Russian foreign ministry told the Financial Times. It added that it would become more effective as more countries got involved. 

Iran has been expressing it’s frustration with the other parties who signed the 2015 deal at not helping Iran after the US imposed sanctions — namely on oil imports, which is Iran’s most valuable commodity. 

In a televised speech on Sunday, Iranian President Rouhani said “we are ready to hold talks with America today,” but wants to return to the Obama-era nuclear agreement and have the economic sanctions from President Donald Trump’s administration lifted before that happens.

(ZH) Iranian Boats Attempt To Seize UK Tanker In Straits Of Hormuz

(ZH) With the Persian Gulf uncharacteristically quiet in recent days, without any material provocation either real of staged, late on Wednesday CNN reported that five armed Iranian Islamic Revolutionary Guard boats unsuccessfully tried to seize a British oil tanker in the Persian Gulf. There was no independent verification of the report, but instead it was once again sourced to those who stands to gain the most from a way with Iran, namely “two US officials with direct knowledge of the incident.”British Heritage tanker

According to the report, the British Heritage tanker was sailing out of the Persian Gulf and was crossing into the Strait of Hormuz area when it was approached by the Iranian boats. The Iranians ordered the tanker to change course and stop in nearby Iranian territorial waters, according to the officials. A US aircraft was overhead and recorded video of the incident, although so far a video has not been released.

In addition to the US aircraft escort, the UK’s Royal Navy frigate HMS Montrose had been escorting the tanker, and during the confrontation, it trained its deck guns on the Iranians and gave them a verbal warning to back away, which they did. Montrose is equipped on the deck with 30 mm guns specifically designed to drive off small boats. The frigate was in the region performing a “maritime security role” according to a prior notification from UK officials.HMS Montrose

The incident takes place less than a week after British Royal Marines in Gibraltar stormed and seized an Iranian ship believed to have been carrying oil to Syria, in what authorities said was a violation of European Union sanctions on Syria. Iranian President Hassan Rouhani warned earlier Wednesday that the UK “will see the consequences” after the Gibraltar seizure.

Rouhani, speaking in a cabinet session, said, “I tell the British that they are the initiator of insecurity and you will understand its consequences later.”

On Tuesday, the US Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford said that the US and allies were working to put together a coalition of countries to come up with a system to enforce freedom of navigation in the region amid what the US says are heightened threats from Iran.

“We had a discussion today, the Secretary of State, the Secretary of Defense and I and we are engaging now with a number of countries to see if we can put together a coalition that would ensure freedom of navigation both in the Straits of Hormuz and the Bab el Mandeb,” Dunford said following an awards ceremony for his Finnish counterpart.

“I think what we’ll do is, we certainly from the United States perspective would provide maritime domain awareness and surveillance,” he said, adding that naval vessels would escort commercial ships that shared a country of origin, if required.

“Escorting in the normal course of events would be done by countries who have the same flag so a ship that is flagged by a particular country would be escorted by that country and I think what the United States can provide is domain awareness, intelligence, surveillance, reconnaissance and then coordination and patrols for other ships that would be in the area would be largely coalition ships,” Dunford said.

This alleged latest provocation by Iran comes just hours after President Trump announced on Twitter that sanctions on Iran will “soon be increased, substantially!” following news that Iran was enriching uranium beyond the limits imposed by the Iran Nuclear Deal.

Last month Trump halted plans for a military strike against Iran in retaliation for the shooting down of a US drone, Trump said he found it hard to believe it had been an “intentional” act. “I think that it could have been somebody who was loose and stupid that did it,” Trump said in the Oval Office on June 20.

It is unclear if Trump has been briefed on the latest events in the Gulf, and if this alleged attempt at seizing a western tanker will give the neocons in Trump’s circle enough sway to finally commence the Gulf war which could send oil above $300 and involve all the world’s superpowers in what would be one giant, and very deadly proxy war.

(EUobserver) British navy seizes oil tanker busting EU sanctions

(EUobserver)

The British navy has seized an oil tanker called Grace 1 on its way past Gibraltar to the Syrian refinery of Baniyas, which is under EU sanctions. Fabian Picardo, the Gibraltar first minister, told the BBC he had written to the European Commission and EU Council presidents to give details. The operation comes amid uncertainty on UK-EU defence and foreign policy cooperation after Brexit due later this year.

(Axios) Higher temperatures could fuel a global energy demand to stay cool

(Axios)

A fan blowing on Earth to cool it down
Illustration: Sarah Grillo/Axios

A new peer-reviewed study finds that higher temperatures could bring large increases in energy demand as use of cooling soars, far outweighing reduced need for heating.

Why it matters: The paper published in Nature Communications finds that depending on future warming levels, global demand in 2050 could be 11%–58% higher than what’s otherwise expected based on economic development and population growth.

One level deeper: While the total and regional ranges are significant, the paper notes: “We find broad agreement among [Earth System Models] that energy demand rises by more than 25% in the tropics and southern regions of the USA, Europe and China.”

What’s new: “These are the first globally comprehensive estimates of how much energy demand will change due to the increase in temperatures that is projected to happen, not just globally averaged but depending on where around the globe different climate models say it is going to be hotter rather than colder compared to the global mean,” Boston University professor and co-author Ian Sue Wing tells Axios.

My thought bubble: The paper underscores a sticky problem. Adapting to warming could make cutting emissions even harder if those higher energy needs aren’t met with low-carbon sources.

  • The paper — co-authored by researchers with the International Institute for Applied Systems Analysis and Ca’ Foscari University of Venice — does not model how additional demand will be met.
  • “The emissions story is going to depend on how we choose to generate that additional electricity,” Sue Wing said.

What they did: The study is a global and regional look at potential warming-driven energy demand increases in 2050, looking at use of electricity, petroleum and natural gas in four sectors: industry, housing, business and agriculture.

They modeled a large set of potential outcomes based on 2 major emissions scenarios commonly employed by scientists.

  • One shows emissions soaring essentially unchecked through the century, enabling large temperature increases.
  • The other is an emissions peak around 2040, follow by a plateau and decline, which still brings significant warming.

But, but, but: The authors acknowledge limitations in the modeling and the need for future research.

  • Their analysis does not consider factors including changes in energy prices that could dampen energy demand growth, technological improvements, policy changes and more localized energy demand responses.

Go deeper: A/C demand expected to triple

(JN) Gulbenkian vende Partex a petrolífera tailandesa por 622 milhões

(JN)

A petrolífera da Fundação Gulbenkian trocou de mãos após mais de um ano de negociações: foi comprada pela tailandesa PTT Exploration and Production (PTTEP).

A Partex já tem novo dono: a PTT Exploration and Production (PTTEP), empresa pública tailandesa de exploração e produção de petróleo. A venda, que estava a ser negociada há mais de um ano, foi fechada por cerca de 622 milhões de dólares (o equivalente a 553,3 milhões de euros) e anunciada esta segunda-feira, 17 de junho.

“A operação terá um valor de 622 milhões de dólares, sujeita aos ajustes habituais nestas transações. O acordo seguirá agora o habitual processo de autorizações, que deverá estar concluído até final do ano”, informa a empresa em comunicado.

Segundo a mesma informação, a PTTEP pretende utilizar a Partex “como uma plataforma de crescimento, alargando as relações que a empresa hoje detém nos países em que opera”, comprometendo-se a petrolífera tailandesa a “manter a gestão e restantes colaboradores da empresa, bem como o escritório em Lisboa”. Também a marca Partex vai ser mantida. 

“A compra da Partex encaixa na estratégia da PTTEP, focando-se em áreas prolíficas no Médio Oriente, em parceria com operadores mundiais. Este portefólio diversificado e auto-financiado não fornecerá apenas o fluxo de receita, a produção e as reservas imediatas, mas também fortalecerá o nosso relacionamento com os governos locais, abrindo um caminho forte para a PTTEP expandir seus futuros investimentos em exploração e produção nesta região”, afirma a empresa tailandesa numa nota publicada esta segunda-feira e citada pela Bloomberg.

A PTTEP, cotada na bolsa da Tailândia, tem 46 projetos petrolíferos em 12 países.

Nesta operação, a Fundação Calouste Gulbenkian – que decidiu em 2018 desinvestir na área do petróleo e gás – teve como consultores a Jefferies International Limited, a Linklaters e a Morais Leitão, Galvão Teles, Soares da Silva & Associados.

O CEO da petrolífera, António Costa e Silva, já havia avançado que o objetivo era concluir a venda da Partex até ao final de junho. “A Partex é uma noiva apetecível”, declarou em entrevista ao Jornal Económico, na qual revelou ainda que existiam “mais de três interessados” na altura.

A petrolífera já havia sido cobiçada – e quase entregue – aos chineses da CEFC China Energy, em fevereiro de 2018. Mas no espaço de dois meses as negociações caíram por terra, uma vez que a empresa chinesa não foi capaz de prestar suficientes esclarecimentos sobre a investigação de que o fundador e presidente da CEFC, Ye Jianming, era alvo naquele momento. “Concluiu-se que não existem condições para continuar as conversações”, disse a FCG em comunicado.

(JN) Trump ameaça sanções para travar gasoduto entre Rússia e Alemanha

(JN)

Donald Trump quer travar o projeto Nord Stream 2 e ameaça avançar com sanções, embora não especifique contra quem. Moscovo acusa-o de “chantagem” e concorrência “injusta”.

Donald Trump continua a disparar ameaças a vários dos principais parceiros mundiais dos Estados Unidos. Desta vez, os alvos foram a Alemanha e a Rússia. Em causa está o projeto do gasoduto Nord Stream 2, que irá ligar os dois países europeus e que também tem merecido resistência por parte da Comissão Europeia. O projeto irá aumentar o fluxo de gás da Rússia para a Alemanha, uma meta que Trump pretende travar.

Não é a primeira vez que o presidente norte-americano faz críticas a este projeto, mas fica por esclarecer quem seriam as empresas ou governos alvo de sanções por parte dos Estados Unidos. Na mais recente investida, limitou-se a dizer que está a “proteger” a Alemanha.

“Estamos a proteger a Alemanha da Rússia. A Rússia está a receber milhões e milhões de dólares da Alemanha pelo seu gás”, afirmou o presidente dos Estados Unidos, na Casa Branca, após uma reunião com o presidente polaco, Andrzej Duda. Para Trump, “a Alemanha está a cometer um erro tremendo ao confiar tanto no gasoduto”, já que “é uma tremenda quantidade da sua energia que será fornecida” por esse projeto.

Mesmo sem detalhes, as afirmações de Trump já mereceram resposta por parte de Moscovo. Estas declarações, afirmou o porta-voz do Kremlin, “não são nada se não chantagem e uma forma injusta de concorrência”.

O presidente russo Vladimir Putin foi mais longe e, em declarações ao canal de televisão Mir TV, afirmou que as relações entre os Estados Unidos e a Rússia estão a “deteriorar-se e a ficar cada vez piores”.

O Nord Stream 2 é um empreendimento conjunto entre a energética russa Gazprom e outras cinco empresas europeias. O objetivo é fornecer 55 mil milhões de metros cúbicos de gás natural russo, anualmente, à Alemanha e a outros países europeus, através de um gasoduto duplo colocado no fundo do Mar Báltico.

A própria Comissão Europeia tece críticas a este projeto e tem procurado mesmo chegar a acordo com a Alemanha para estabelecer regras que lhe permitam ter uma palavra a dizer sobre a gestão do gasoduto, uma opção que tem sido rejeitada por Angela Merkel. Já da parte dos Estados Unidos, os receios são de que a Rússia utilize o fornecimento de gás natural como forma de pressão sobre os restantes países europeus dependentes da sua energia.

(ZH) 2 Tankers Damaged After Suspected Torpedo Attack Near Strait Of Hormuz; Oil Soars

(ZH)

Update: The Front Altair, the Marshall Islands flag tanker damaged in Thursday’s attacks, has now sunk, according to Iranian television.

* * *

And just like that…war with Iran is now almost assured.

Roughly one month after the US accused Iran of attacking Saudi- and UAE-docked oil tankers with naval mines in the Strait of Hormuz, two oil tankers were attacked in the Sea of Oman (not far from where the prior attacks occurred), leaving both ships seriously damaged, Bloombergreports.

So far, no casualties have been reported. The attack left one of the ships “ablaze and adrift,” according to the Associated Press.

Sailors from both vessels were being evacuated as the US Navy rushed to assist.

Iran

The Bahrain-based US Fifth Fleet said it received distress signals from the two ships roughly 50 minutes apart. As BBG reports, the incident will almost certainly “inflame” tensions between the US and its Arab allies on one hand, and Iran on the other.

The development will inflame already-rising political tensions in the region weeks after four vessels, including two Saudi oil tankers, were sabotaged in what the U.S. said was an Iranian attack using naval mines. Tehran denied the charge.

The Bahrain-based Fifth Fleet said it received two separate distress signals at 6:12 a.m. and about 7:00 a.m. local time. “U.S. Navy ships are in the area and are rendering assistance,” Commander Josh Frey, a spokesman, said. Iran said it has rescued 44 sailors.

Though a suspected aggressor has not yet been officially named, and an investigation into the cause of the incident has only just begun, the notion that Iran will be implicated looks extremely likely, even as Iranian ships helped rescue all 44 sailors who were aboard the two ships. Iran has already denied responsibility for the attack.

BBG

The manager of one of the tankers, the Japan-flagged Kokuka Courageous, which had been carrying a cargo of methanol from Saudi Arabia to Singapore, said the vessel had been damaged as the result of “a suspected attack,” though the manager added that the ship’s cargo was secure.

“The hull has been breached above the water line on the starboard side,” Bernhard Schulte GmbH & Co KG said in a statement on its website.

Another tanker, Norwegian-owned and Marshall Islands-flagged Front Altair, sent a distress signal to the UAE port of Fujairah. It had loaded an oil shipment in Abu Dhabi not long before the incident.

Officials said it appeared the ships had been attacked with torpedoes. Another report cited officials saying three detonations had been heard.

The Front Altair was delivering a cargo of naphtha to Taiwan refiner CPC Corp, one company official said. The cargo was supplied by Abu Dhabi’s Adnoc.

Considering the involvement of the Japan-flagged vessel, the timing of the incident would be ironic. The suspected attacks unfolded as Japanese PM Shinzo Abe met with Iran’s Supreme Leader Ayatollah Ali Khamenei on Thursday, the second and final day of his visit, which was intended to de-escalate tensions in the region. There were no immediate details about what they discussed.

Meanwhile, in Tokyo, Japan’s Chief Cabinet Secretary Yoshihide Suga, a top government spokesman, told reporters that Abe’s trip was intended to help de-escalate tensions in the Mideast — but not specifically mediate between Tehran and Washington.

Oil prices are popping higher on the news, as the latest replay of one of history’s most famous false-flag naval attacks, the Gulf of Tonkin incident, which helped precipitate the Vietnam war, ratchets up tensions in the region. At one point, Brent crude was up as much as 4% to over $62 a barrel.

At the very least, the US military will use the attack as an excuse to continue its escalation of personnel in one of the most sensitive waterways for the global oil trade. One-third of all oil traded by sea passes through the Strait of Hormuz.

Worst case, it looks like NSA John Bolton may have just gotten the excuse he needs to justify a full-scale invasion of Iran.

(BBG) Sonangol Boss Fired by Angola’s President as Fuel Runs Dry

(BBG)

  •  Saturnino, board dismissed amid revamp of state oil company
  •  Sonangol has said lack of dollars a reason for fuel crunch

Angolan President Joao Lourenco fired Sonangol EP Chairman Carlos Saturnino as he revamps the company amid persistent fuel shortages in the southern African nation.

The presidency appointed Gaspar Martins to lead the state-owned company with a new board after incumbent members were dismissed, according to a statement late Wednesday. Lourenco met with oil industry officials on Tuesday, vowing to end shortages at gas stations across the country that imports almost all of its fuel.

Lourenco appointed Saturnino chairman in 2017 and fired Isabel dos Santos after he replaced her father, Jose Eduardo dos Santos, as president. Sonangol, long the main engine of Angola’s oil-focused economy, has been at the center of the leader’s vow to fight corruption. He also plans to revive crude output, which has dropped to the lowest level in more than a decade following years of under-investment in new projects.

Angola's oil production has dropped to the lowest in more than a decade

The firings appear to be driven by the fuel shortage, one of the worst in Angola’s history, according to Salih Yilmaz, an analyst at Bloomberg Intelligence. “Reforms and the reorganization of the company look like steps in the right direction, though the outlook for the country’s output profile remains dim,” he said.

Sonangol said last week that a lack of foreign currency reserves needed to import fuel was the main reason for the shortages in the country. The presidency blamedinsufficient communication between the company and other state institutions for the supply crunch.

Oil Reforms

The government of Africa’s second-biggest producer has taken measures to boost oil activity, including tax concessions to companies developing smaller fields. As part of the reforms, it has transferred the role of concessionaire of crude and gas blocks from Sonangol to the new National Agency for Petroleum, Gas and Biofuels. Sonangol is also selling companies and assets outside its core business to focus on oil.

Angola’s output dropped below 1.4 million barrels a day in April from almost 1.9 million as recently as 2015, according to data compiled by Bloomberg. Production could fall to 1 million barrels a day by 2023 without more projects, Yilmaz said. French major Total SA and Italy’s Eni SpA have started pumping from new areas in the past year.

The last few years have been dramatic for Saturnino. He was fired from Sonangol in 2016 by Isabel dos Santos, and was brought back by Lourenco to replace her. Angola is on the brink of a “blackout due to the lack of fuel,” dos Santos tweeted on Tuesday.

Martins has served on the board of Sonangol and in various other roles, according to the company’s website.

(Reuters) U.S. prepares to end Iran oil waivers; Asian buyers to be hardest hit

(Reuters) The United States is expected to announce on Monday that buyers of Iranian oil need to end imports soon or face sanctions, a source familiar with the situation told Reuters, triggering a 3 percent jump in crude prices to their highest for 2019 so far.

Officials in Asia opposed the expected move, pointing to tight market conditions and high fuel prices that were harming industry.

The source confirmed a report by the Washington Post that the administration will terminate the sanctions waivers it granted to some importers of Iranian oil late last year.

Benchmark Brent crude oil futures rose by as much as 3.2 percent to $74.31 a barrel, the highest since Nov. 1, in early trading on Monday in reaction to expectations of tightening supply. U.S. West Texas Intermediate (WTI) futures climbed as much as 3 percent to $65.87 a barrel, its highest since Oct. 30.

U.S. President Donald Trump wants to end the waivers to exert “maximum economic pressure” on Iran by cutting off its oil exports and reducing its main revenue source to zero.

Saudi Arabia, the world’s top oil exporter, was willing to compensate the potential supply loss, but it would first need to assess the impact before boosting its own production, a source familiar with Saudi thinking told Reuters.

In November, the U.S. reimposed sanctions on exports of Iranian oil after President Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.

Washington, however, granted waivers to Iran’s eight main buyers – China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece – that allowed them limited purchases for six months.

On Monday, Secretary of State Mike Pompeo will announce “that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate,” the Post’s columnist Josh Rogin said in his report, citing two State Department officials that he did not name.

Oil markets have tightened this year because of supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

As a result, Brent prices have risen by more than a third since January, and WTI by more than 40 percent.

Analysts said they expected the Trump administration to push OPEC and its de-facto leader Saudi Arabia to stop withholding supply to calm market fears of oil shortages.

Trump spoke with Saudi Arabia’s Crown Prince Mohammed bin Salman by phone last week, and discussed ways of “maintaining maximum pressure against Iran.”

The source familiar with Saudi thinking said any action by OPEC’s biggest producer depends on the certainty of scrapping the waivers and its effect on the oil market. Saudi Arabia has about 2 million barrels of oil per day of spare capacity.

Riyadh raised its oil output last year after the Trump administration pledged to bring Iranian crude exports to zero, only to grant waivers later triggering a decline in prices and build-up in oil inventories.

“The Saudis don’t want to make the same mistake again,” one OPEC source said.

Iraq, OPEC’s second largest producer, is committed to the global supply cuts taken by OPEC and its allies and any decision to raise production must be taken collectively, an Iraq oil ministry spokesman said on Monday.

Iraq is among major producers from OPEC and non-OPEC who are meeting next month in Jeddah, Saudi Arabia, as part of a panel committee to discuss the oil market and make output recommendations, the spokesman said.

ASIA HIT HARDEST

An end to the exemptions would hit Asian buyers hardest. Iran’s biggest oil customers are China and India, who have both been lobbying for extensions to sanction waivers.

Geng Shuang, a Chinese foreign ministry spokesman, said at a daily news briefing in Beijing on Monday that it opposed unilateral U.S. sanctions against Iran and that China’s bilateral cooperation with Iran was in accordance with the law.

He did not say whether China would heed the U.S. call to cut Iran oil imports to zero.FILE PHOTO: Gas flares from an oil production platform at the Soroush oil fields in the Persian Gulf, south of the capital Tehran, July 25, 2005. REUTERS/Raheb Homavandi/File Photo

In India, refiners have started a search for alternative supplies.

The government, however, declined to comment officially.

“We are engaged with the U.S. administration on this matter and once the U.S. side makes a comment on this matter, then we will come up with a comment,” said a source at India’s foreign affairs ministry who declined to be named.

“I expect India to fall in line with the sanctions,” said Sukrit Vijayakar, director of Indian energy consultancy Trifecta.

South Korea, a close U.S. ally, is a major buyer of Iranian condensate, an ultra-light form of crude oil that its refining industry relies on to produce petrochemicals.

Government officials there declined to comment, but Kim Jae-kyung of the Korean Energy Economics Institute said the end of the sanction waivers “will be a problem if South Korea can’t bring in cheap Iranian condensate (for) South Korean petrochemical makers.”

Japan is another close U.S. ally in Asia that is also a traditionally significant buyer of Iranian oil.

The government also declined to comment ahead of an official U.S. announcement, but Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corporation (JOGMEC), said the end of the sanction waivers “is not a good policy for Trump.”

Prior to the re-imposition of sanctions, Iran was the fourth-largest producer among OPEC at almost 3 million bpd, but April exports have shrunk to well below 1 million bpd, according to ship tracking and analyst data in Refinitiv.

(JE) Galp produziu mais 8% de petróleo e gás no primeiro trimestre

(JE)A

O Brasil foi responsável pela maioria da produção (102,1 mil barris), com Angola a produzir 8,7 mil barris.

A Galp produziu mais 8% de petróleo e gás natural no primeiro trimestre de 2019 face a período homólogo para um total de 110,8 mil barris.

O Brasil foi responsável pela maioria da produção (102,1 mil barris), com Angola a produzir 8,7 mil barris. A grande maioria da produção da Galp corresponde a petróleo (99,5 mil barris), pesando 88,3% da produção total.

Já no segmento “gas and power”, as vendas totais de gás natural/gás natural liquefeito mantiveram-se estáveis nos 1.971 mil milhões de metros cúbicos, com as vendas a clientes diretos a recuar 6% para os 1.157 mil milhões de metros cúblicos.

No segmento refinação e distribuição, a Galp produziu menos 10% de matérias primas processadas, com a venda de produtos refinados a cair 11%. A margem de refinação recuou 30% para os 2,3 dólares por barril.

A Galp vai divulgar os seus resultados financeiros do primeiro trimestre de 2019 no dia 29 de abril, antes da abertura do mercado.

(CNBC) OPEC’s oil production plunges to four-year low in March as Saudis slash output

(CNBC)

  • OPEC’s output falls by 534,000 barrels per day in March to just over 30 million bpd as the producer group continues coordinated production cuts.
  • Saudi Arabia takes another 324,000 bpd off the market, bringing output to just under 9.8 million bpd.
  • Venezuela’s production plunges by 289,000 bpd to 732,000 bpd as the country’s oil industry labors under economic crisis and U.S. energy sanctions.
RT: Khalid al-Falih, Saudi Arabia

Saudi Arabia’s Oil Minister Khalid al-Falih listens during a news conference after an OPEC meeting in Vienna, Austria, November 30, 2017.Heinz-Peter Bader | Reuters

Oil supplies from OPEC sank by half a million barrels in March, hitting a four-year low, as Saudi Arabia continues to slash output and Venezuela’s production plunged amid ongoing economic crisis.

The monthly production decline amounts to roughly half a percent of global oil demand. The drop is greater than the total monthly output of four of OPEC’s 14 members.

The producer group, along with Russia and other non-member countries, is trying to keep 1.2 million barrels per day off the market through June, following a collapse in crude prices at the end of 2018. The production curbs by the so-called OPEC+ alliance aim to drain oversupply from the oil market and boost prices.

OPEC’s output fell by 534,000 bpd in March to 30.02 million bpd, according to independent sources cited by the group in its monthly report. This year, supply from the group has fallen by more than 1.5 million bpd, helping to drive international Brent crude prices 30 percent higher.

The headline OPEC output was the lowest since February 2015, when the group pumped 29.97 million bpd, though its membership has changed several times since then.

Much of the March decline is due to Saudi Arabia’s will to aggressively cut production. In March, the Saudis took another 324,000 bpd off the market, bringing output to just under 9.8 million bpd and delivering on Energy Minister Khalid al-Falih’s vow to pump well below 10 million bpd.

Saudi output has now fallen by about 1.3 million bpd from its all-time high at 11.1 million bpd in November, when the kingdom surged production to offset U.S. energy sanctions on OPEC-member Iran.

The terminal decline in Venezuelan output continues to help OPEC+ cut global oil supplies. Following a series of blackouts that disrupted oil operations, Venezuela’s production plunged by 289,000 bpd to 732,000 bpd in March.

Venezuela, already mired in a years-long economic crisis, is now grappling with U.S. sanctions against state-owned oil giant PDVSA and a political standoff between socialist leader Nicolas Maduro and opposition figure Juan Guaido.

The next biggest decline came from Iraq, which cut production by 126,000 bpd in March to just over 4.5 million barrels. That brought OPEC’s second largest producer roughly in line with its production cap for the first time this year.

The declines were offset by Libya, where output surged by 196,000 bpd to nearly 1.1 million bpd. The nation’s production often fluctuates due to unrest, and the its supplies are now in question after a Libyan general sent his troops into Tripoli, the seat of a rival United Nations-recognized government.

OPEC+ alliance members will meet in June to discuss oil policy. Saudi Arabia is leaning towards carrying over the production cuts into the second half of 2019, while Russia refuses to commit to an extension.

This year’s oil price rally has prompted President Donald Trumpto call on OPEC to hike output and tamp down prices. The producer group has so far ignored Trump’s warnings on Twitter.

Donald J. Trump@realDonaldTrump

Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!94.4K1:30 PM – Mar 28, 2019

(ECO) FMI revê em baixa projeções para o preço do petróleo. Deverá ficar abaixo dos 60 dólares até 2023

(ECO)

Fundo reviu em baixa projeções para para o preço da matéria-prima tanto em 2019 como em 2020. O impacto da desaceleração económica na procura e os conflitos políticos são as maiores dúvidas.

O preço do petróleo deverá fechar o ano com uma desvalorização de 13,4%. A projeção é do Fundo Monetário Internacional (FMI), que reviu em baixa o valor da matéria-prima esperado em 2019 e 2020, apesar da incerteza política no mercado. Antecipa que o barril atinja os 60 dólares apenas em 2023.

“Com base nos contratos de futuros de petróleo, o preço médio do petróleo é projetado em 59,2 dólares em 2019 e 59 dólares em 2020 (abaixo dos 68,8 dólares e 65,7 dólares, respetivamente, no WEO de outubro de 2018)”, refere o World Economic Outlook do FMI, divulgado esta terça-feira. O valor compara com os 64 dólares em que o crude WTI norte-americano negoceia atualmente e com os 68,33 dólares em que fechou o ano passado.

Assim, a organização de Bretton Woods projeta uma desvalorização de 13,4% em 2019 e de 0,2% em 2020. “Os preços do petróleo deverão manter-se no mesmo intervalo, atingindo os 60 dólares por barril em 2023 (valor inalterado face ao WEO de outubro de 2018), em linha com as perspetivas de diminuição da procura a médio prazo e ajustamentos da produção para evitar excedente de oferta”, aponta.

A “montanha russa” dos preços do petróleo

Desaceleração económica e incerteza política vão determinar preços

preço da matéria-prima ultrapassou os 80 dólares por barril em outubro do ano passado, atingindo o valor mais elevado desde novembro de 2014 devido aos receios com as sanções petrolíferas dos EUA ao Irão. No entanto, a maior economia do mundo acabou por abrir exceções e permitir que grandes importadores continuassem a fazer negócio com o Irão. Além disso, países como os EUA, Canadá, Iraque, Rússia e Arábia Saudita produziram mais petróleo que o esperado, levando a uma forte quebra nos preços no final do ano passado.

Em dezembro, os países da Organização dos Países Exportadores de Petróleo (OPEP) e um grupo de outros países fora do cartel (incluindo a Rússia) prolongaram o acordo de cortes na produção para diminuir o excesso de oferta e causar um aumento gradual dos preços.

A recuperação foi conseguida (e ajudada por eventos pontuais como a crise na Venezuela), com o barril de WTI a ultrapassar os 60 dólares em fevereiro. Desde o início do ano já valorizou 19%, enquanto o Brent negociado em Londres já acumula um ganho de 17,3% para mais de 70 dólares. Mas o fundo antecipa que o acumulado do ano irá revelar uma realidade diferente. “Apesar de um equilíbrio nos riscos, há uma incerteza substancial em torno das projeções para os preços do petróleo devido à elevada incerteza política”, sublinhou o FMI.

“Os riscos para uma subida dos preços a curto prazo incluem eventos geopolíticos no Médio Oriente, distúrbios civis na Venezuela, uma postura mais dura dos EUA contra o Irão ou a Venezuela e um crescimento da produção norte-americano mais lento do que o esperado. Os riscos negativos incluem tanto produção dos EUA como não-cumprimento dos países da OPEP e não-OPEP mais fortes que o esperado. As tensões comerciais e outros riscos para o crescimento global também podem afetar ainda mais a atividade global e respetivas perspetivas, reduzindo a procura por petróleo“, acrescentou.

(Reuters) Goldman increases 2019 oil price forecasts amid supply cuts, sanctions

(Reuters)

(Reuters) – Goldman Sachs has raised its forecast for crude oil prices this year, with supply hit by the “shock and awe” implementation of OPEC-led output cuts and by U.S. sanctions on Iran and Venezuela.FILE PHOTO: An oil tanker is being loaded at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. Picture taken May 21, 2018. REUTERS/Ahmed Jadallah/File Photo

The investment bank said in a note dated April 8 that it now expects benchmark Brent crude prices to average $66 per barrel in 2019, compared with its previous estimate of $62.50.

It sees U.S. crude oil averaging $59.50 per barrel, up from its last forecast of $55.50.

Oil prices hit their highest in five months on Tuesday, with Brent marking $71.34 per barrel and U.S. crude reaching $64.77 per barrel. [O/R]

Crude markets have tightened this year as the United States imposed sanctions on oil exporters Iran and Venezuela, while the producer club of the Organization of the Petroleum Exporting Countries (OPEC) has been withholding supply to prop up prices.

Goldman added that it expected the Brent forward curve to shift further into backwardation, a situation where contracts for future delivery are cheaper than spot supplies. Backwardation indicates a tighter market.

That comes as Goldman expects the global oil market to remain in a supply-deficit of about 0.5 million barrels per day in the second quarter.

The bank now sees Brent prices at $72.50 per barrel in the second quarter, compared with $65 previously. But it maintained its 2020 Brent oil price forecast at $60 per barrel.

“While the macro risk-on environment and the threat of disruptions may drive spot prices even higher, we still expect that prices will decline gradually from this summer as shale and OPEC production increases,” said Goldman.

How OPEC manages its exit from the current supply cuts will be a key influence on oil prices in coming months and years, Goldman added.

(BBG) Venezuela’s Oil Capital Ransacked When the Lights Went Out

(BBG) By Andrew Rosati

  •  In Maracaibo, hundreds of businesses were looted in blackout
  •  The pillage shows that anyone’s grip on the nation is tenuous

The sack of Maracaibo was almost over Thursday after a frenzy of violence and looting that showed just how close Venezuela is to total chaos.

In the country’s sweltering oil capital, about 500 businesses — bakeries, tire shops, entire shopping malls — were pillaged during the nationwide power blackout that began March 7. Looting continued even after the lights flickered on as residents overwhelmed the security forces of the Nicolas Maduro regime. Storekeepers are just beginning to clean up as the desperate keep sifting through the rubble.

“If people made enough to make ends meet, we wouldn’t be trying to get by like this,’’ said Enrique Gonzalez, 18, a bus conductor whose driver was scavenging at a Pepsi warehouse. Thousands of bottles had been removed in mere hours, and people were now ripping out copper wire and scrap metal. The hulks of delivery trucks sat on pallets, tires long removed.

“This country has gone to hell.”

Lawless Land

Venezuela’s great blackout threw the crisis-ridden nation into fresh tumult. Maduro has presided over an epic descent, prompting the U.S. and scores of other nations to recognize opposition leader Juan Guaido as the rightful head of state. Maduro has concentrated resources and troops in Caracas, the capital. The ravaging of Maracaibo, population 1.6 million, shows that anyone’s control over the vast nation is tenuous.

Maduro blamed the blackout on a U.S. cyber attack, without supplying proof. Experts blamed decaying infrastructure. In Maracaibo, many transformers and substations burst into flames after power was restored this week and large sections of the city remained in the dark. Long lines of people bearing jugs and barrels formed at leaky water trucks, streams and burst pipes.

On Guajira Avenue, the four-lane main drag where much of the mayhem occurred, there was little security. During a daylong tour of looted malls, warehouses and shopping centers, a single municipal squad car was seen. Officers inside warned profanely that no protection would be forthcoming.

Hot Ice

The unrest began in the Saturday-afternoon heat when an ice company began demanding payment in dollars. A desperate crowd tore through its factory, then emptied nearby pharmacies and shoe stores. By nightfall, the heart of Maracaibo was engulfed as people deprived of life’s necessities took whatever they could get.

Empresas Polar SA, a Venezuelan food giant, said that its Pepsi plant, brewery and pasta factory were almost destroyed; people carried off thousands of cases of beer and soda and 160 pallets of food. The company lost 22 trucks and five forklifts. Holes were punched through cinder-block walls around the soda warehouse.

On Monday, Ferre Mall, a home-improvement shopping center of more than 50 stores, was emptied by people who burst through its iron gates and glass doors. In darkness, they lit scraps for illumination. A paper-goods store caught fire and the blaze spread.

Travel agencies, cosmetic stands and snack shops were mere shells Thursday. The building reeked of smoke and melted asphalt from the roof had hardened on the floor. Workers carried debris over broken porcelain and glass.

No Resistance

“It’s hard to swallow,’’ said Bernardo Morillo, 60, who built and manages the mall. “The national guard stood by as this vandalism happened and the firefighters didn’t even show.’’

Throughout the city, security forces were useless as people took anything of value, including cash machines, door frames, ovens, computers and surveillance cameras, said Ricardo Costa, vice president of the Zulia state chapter of the Fedecamaras business group. The organization has been bitterly opposed to the Maduro regime, which Costa said reserves its strength to quash demonstrators.

“How is it possible that a thousand guardsmen are deployed to repel 50,000 protesters, but when a thousand looters come to a mall only 50 were sent?’’ he said.

“You could say this began because people are hungry, but the looters didn’t take just food — it morphed into aimless vandalism.’’

Fat City

At a Centro 99 supermarket, shelves were picked clean and the floor was carpeted with pieces of pasta, plastic spoons and dried tomato sauce. Manager Luis Parra said 10 of the chain’s 12 locations were looted.

“They even carried off the lard and flour to bake bread in their bare hands,’’ he said.

Maracaibo once was a city of excess. The preferred drink was whiskey and food was fried and plentiful. Sitting on a massive lake that bears its name, Maracaibo was home to big-talking oilmen and ranchers — Houston’s Venezuelan doppelganger.

The nation’s commercial oil production started in the region in the 1910s after locals noticed crude seeping out of the ground. For a century, deposits below Lake Maracaibo ensured that governments were flush. Chevron Corp.Royal Dutch Shell Plc and Exxon Mobil Corp. fueled a boom of shopping malls, warehouses and supermarkets in the former fishing village.

Dwindling Flow

After two decades of socialist rule, big oil has all but vanished. Zulia’s production has plunged to 325,000 barrels a day in 2018 from 624,000 in 2010, according to the state oil company. Production in Venezuela as a whole fell last year to a 69-year low, according to OPEC data compiled by Bloomberg.

Maracaibo’s new-money glitz now feels like a lifetime ago. Fedecamaras estimated that damage during the blackout could easily surpass $200 million.

Requests to interview Omar Prieto, Zulia’s governor and a member of the ruling socialist party, went unanswered. He told reporters Wednesday that 570 looters were arrested. He also implored businesses to reopen and said more than 200 officers were deployed. “It’s our turn to protect you,’’ he said.

But few police were to be seen Thursday as owners repaired security shutters and sealed entries with cinder blocks and cement.

Standing By

Ovidio Oscano stood in his watchman’s post at a Makro market, the Venezuelan equivalent of Costco, as dozens of people denuded the structure.

“They’ve been at it since Monday,’’ said Oscano, a rail-thin 59-year-old who shrugged rather than intervene. “They’re pulling wires, air conditioners, pipes — they’re literally running off with the roof.’’

When the looters realized they were being photographed, they charged and threw rocks.

“A business can be rebuilt,” said Costa of Fedecamaras. But “everyone knows that working here means working in anarchy, that anything can happen to you at any moment.’’

On Thursday, Yajira Bernier left home to search for provisions for the first time since the lights went out. Vendors at the Los Plataneros market demanded dollars or Colombian pesos, and the butcher shop had only two products: cheese and pig feet. Bernier chose the latter.

“We’re panic buying today,” she said. “We don’t know what will come tomorrow.”

(BBG) OPEC to Be Squeezed by U.S. Shale Until Mid-2020s, IEA Says

(BBG) By Grant Smith11 de março de 2019, 08:00 WET Updated on 11 de março de 2019, 11:08 WET

  •  Declines in Iran, Venezuela to reduce cartel’s output capacity
  •  Demand for group’s crude stays below pre-cuts level until 2024

OPEC’s loss of market power to what was once its biggest customer will continue until the middle of the next decade as U.S. shale oil thrives.

By 2024, the Organization of Petroleum Exporting Countries’ capacity to pump crude will actually shrink because of declines in Iran and Venezuela, according to the International Energy Agency. As rivals grow, the amount of oil the world needs from the cartel each year won’t recover to pre-2016 levels — before OPEC started cutting production — throughout the period.

The report may be sobering reading for OPEC, which has capped its production for the past two years to stave off a global glut that would depress prices. Although its cutbacks have mostly achieved those aims, they’ve also invigorated the shale-oil boom in the U.S., helping the country become the world’s biggest crude producer.

America’s energy expansion will proceed, accounting for 70 percent of the growth in global production capacity through to 2024, the Paris-based IEA said in its medium-term report. By that time, the nation could be able to export 9 million barrels a day, exceeding the export capabilities of Russia and coming close to those of Saudi Arabia, the agency said.

“The United States continues to dominate supply growth in the medium term,” said the IEA, which advises most of the world’s major economies on energy policy.

With U.S. supply growth to be supplemented by Brazil, Norway and Guyana, the IEA substantially raised forecasts for new crude from outside OPEC, by as much as 3.3 million barrels a day by 2024.

As a result, estimates for the crude needed from OPEC’s 14 members were slashed. By 2024, the world will still need less crude from the group than it was pumping before production cuts started. That suggests that the group will need to persist with its current output restraints into the next decade, the IEA said.

The amount of crude OPEC is capable of pumping is also set to deteriorate, declining by 380,000 barrels a day by 2024 to 34.53 million. U.S. sanctions will hem in Iran’s oil industry and economic turmoil will take its toll on Venezuela’s, the agency said.

Assuming American restrictions remain in place on Iran, the Islamic Republic’s production capacity will sink by 1.2 million barrels a day to 2.65 million in 2024, and Venezuela’s by 56,000 a day to 750,000.

Among OPEC nations, only Iraq and the United Arab Emirates are set to implement significant additions to its production capacity, the IEA forecasts. Iraq will add 900,000 barrels a day to 2024 to reach 5.8 million a day, while the U.A.E will boost by 500,000 to reach 3.85 million a day. If the sanctions on Iran are removed, OPEC’s collective capacity will expand by 820,000 barrels a day.

The agency kept its view on the rate of growth in global oil demand steady, projecting an annual increase of 1.2 million barrels a day, or 1.1 percent, through to 2024. Trade disputes and the prospect of a “disorderly Brexit” pose risks to these projections, it said.

(Axios) A petro-tipping point: U.S. to surpass Saudi oil exports

(Axios)

Oil and gas wells on Denver International Airport property as seen from a passenger plane landing at the airport in Denver, Colorado.
Oil and gas wells on Denver International Airport property. Photo: Robert Alexander/Getty Images

Rising U.S. exports of crude oil and petroleum products (like gasoline) combined are poised to overtake Saudi Arabia’s by the end of the year, Rystad Energy predicts in a new analysis.

Why it matters: It’s a testament to how the U.S. oil boom is increasingly affecting global trade. And it’s just symbolically interesting.Show less

What they’re saying: “This remarkable turnaround is made possible by the continued rise in oil production from [U.S.] shale plays and the increased oil export capacity from the Gulf Coast,” the consultancy said in a brief report.

But, but, but: The U.S. is not rivaling the Saudis when it comes to crude oil exports anytime soon, even as the U.S. crude shipments grow.

  • Numbers bounce around but overall the Saudis are exporting around 7 million barrels per day of crude. The U.S. levels — which have grown sharply in recent years — are still typically much less than half that amount.
  • But the U.S. exports lots of gasoline, diesel and other petroleum products.

The bottom line: The Saudis are at around 9 million barrels per day when you combine crude, natural gas liquids and other petroleum products. The U.S. is at around 8 million and rising.

(CNBC) World’s largest sovereign wealth fund to scrap oil and gas stocks

(CNBC)

  • The exclusion will affect companies that explore and produce oil and will not impact integrated oil and gas companies such as BP and Shell.
  • The move, initiated by Norges Bank which manages the fund, is designed to make the Norwegian government’s wealth less exposed to a lasting drop in oil prices.
  • Oil and gas stocks represented 5.9 percent of equity investments by the end of 2018, Reuters reported, citing fund data. That’s the equivalent to approximately $37 billion.

Sam Meredith@smeredith19Published 11 Hours Ago  Updated 7 Hours AgoCNBC.com

An offshore oil rig off the coast of Norway.

Nerijus Adomaitis | ReutersAn offshore oil rig off the coast of Norway.

Norway’s trillion-dollar sovereign wealth fund plans to dump oil and gas companies from its benchmark index, the finance ministry announced on Friday.

The move, initiated by Norges Bank which manages the fund, is designed to make the Norwegian government’s wealth less exposed to a lasting drop in oil prices.

“The Government is proposing to exclude companies classified as exploration and production companies within the energy sector from the Government Pension Fund Global to reduce the aggregate oil price risk in the Norwegian economy,” the finance ministry said in a statement published on its website.

The exclusion will affect companies that explore and produce oil and will not impact integrated oil and gas companies such as BP and Shell. The Norwegian government also said that the companies to be excluded are those belonging to FTSE Russel’s Index sub sector called exploration and production. According to the government, the value of 134 stocks to be excluded from fund amounted to NOK 70 billion ($7.9 billion), Reuters reported.

Shortly after the announcement, energy stocks worldwide extended losses on Friday morning.

International benchmark Brent crude traded at around $65.18 on Friday, down around 1.7 percent, while U.S. West Texas Intermediate (WTI) stood at around $55.78, more than 1.6 percent lower.

Energy stocks are notoriously volatile. Brent crude collapsed from a near four-year high of $86.29 in early October down to $50.47 in late December — marking a fall of more than 40 percent in less than three months.

Energy stocks

Norway’s government said on Friday that the fund would still be allowed to invest in oil and gas firms so long as they were committed to activities concerning renewable energy.

Oil and gas stocks represented 5.9 percent of equity investments by the end of 2018, Reuters reported, citing fund data. That’s the equivalent to approximately $37 billion.

Norway has faced criticism over its attempts to balance environmentally-focused policies and being one of the world’s largest petroleum producers.

It has become one of the world’s leading countries for electric vehicles while putting pressure on emerging market economies, such as Brazil and Indonesia, to better protect their rainforests.

After a strong start to 2019 for stocks, the Norges Bank website said late last month that the fund is currently valued at $1.03 trillion.

At the end of 2018, the fund’s biggest equity holdings were in Microsoft ($7.5 billion), Apple ($7.3 billion), Alphabet ($6.7 billion), Amazon ($6.4 billion), Nestle ($6.3 billion) and Royal Dutch Shell ($6 billion).

(Reuters) The battle for Citgo: How Venezuela’s opposition leaders seized control

(Reuters)

(Reuters) – Asdrubal Chavez, chief executive of Houston-based Citgo Petroleum Corp, boarded the Venezuelan-owned firm’s corporate jet in Caracas on Jan. 30, after meeting with top officials of the embattled administration of socialist President Nicolas Maduro about the latest U.S. oil sanctions.FILE PHOTO: The corporate logos of the state oil company PDVSA and Citgo Petroleum Corp are seen in Caracas, Venezuela April 30, 2018. REUTERS/Marco Bello/File Photo

Upon landing in the Bahamas – where Chavez has worked for about a year after being denied a U.S. visa – he had received word from Houston that it would be his last trip on a company plane and that his Citgo email account had been shut off.

Day-to-day control of the company had passed to Citgo’s top U.S. executive, Rick Esser, who with the backing of Venezuela’s rising political opposition and the U.S. government would begin clearing the way for a new, anti-Maduro board of directors at Citgo. Esser oversaw the moves to isolate Chavez – a cousin of the late Venezuelan President Hugo Chavez – and would soon start ousting other Citgo executives close to the Maduro administration.

The house-cleaning at the prized U.S.-based subsidiary of Venezuela’s state-owned oil firm, Petroleos de Venezuela (PDVSA), marked a crucial early victory for the country’s rising opposition government – led by self-declared president Juan Guaido – as it struggles to remove Maduro from office and break his grip on the OPEC nation’s oil assets.

The account of the transition of power at Citgo is based on Reuters interviews with more than a dozen current and former Citgo and PDVSA executives, employees, and U.S. and Latin American advisors.

Guaido, head of the Venezuelan congress, announced he would seize the presidency on Jan. 23 because Maduro’s re-election last year was a sham, rendering the socialist leader illegitimate under Venezuela law. Guaido’s claim to interim leadership, until fair elections can be held, was quickly backed by the United States and dozens of other nations.

But Maduro remains in control of the military and PDVSA – making Citgo the obvious first target among national asset for Guaido’s opposition movement to claim, with the help of the U.S. government. The battle for Citgo could prove pivotal in the effort to unseat Maduro because full control of a major U.S. refiner would provide a crucial source of revenue to a post-Maduro administration.

Citgo, with more than $23 billion in annual sales and operations that supply about 4 percent of U.S. fuels, may be the last remaining asset owned by PDVSA with a healthy balance sheet. As PDVSA’s oil production and revenue have plummeted amid crippling debt, mismanagement and international political pressure, Citgo’s U.S. location and financial independence have shielded the firm from the worst of its parent company’s meltdown.

At the end of September, Citgo had net income of about $500 million, according to a creditor with access to financial statements that are not public. The company had almost $500 million in cash and an available credit line of $900 million.

(Graphic: An interactive look at Venezuela’s crude exports to the United States – tmsnrt.rs/2S4YIXB)

Inside Citgo’s Houston headquarters, many employees weary of operating under the control of a failing socialist state eagerly awaited an expected official announcement of the appointments of new company directors, who were chosen by Venezuela’s congress.

“We are not expecting any resistance” to the new board inside the company, said one manager who spoke on condition of anonymity. “On the contrary, we are waiting for directions to lay out the red carpet.”

The new board met together for the first time in Houston on Thursday and named executives to replace those who were ousted.

Board directors and a new executive team was confirmed by Citgo in a statement on Friday. Esser assumed responsibility for day-to-day strategic decisions and operations while a search for a new CEO has begun, it said, without mentioning former CEO Chavez.

“These officers were chosen not only for their experience and knowledge, but also because of their demonstrated commitment to the company over the years,” said Chairwoman Luisa Palacios in the statement.

PDVSA and the White House did not respond to requests for comment.

(Graphic: Citgo’s Louisiana refinery was 2018’s top U.S. consumer of Venezuela’s crude – tmsnrt.rs/2t4ullS.)

SHIFTING ALLEGIANCES

As U.S. sanctions on Jan. 28 shifted the balance of power to Citgo’s anti-Maduro faction of executives, Maduro loyalists scrambled to find their place in the emerging corporate structure.

Two of four senior executives appointed by Chavez openly pledged support for the incoming board of directors in meetings with employees, said two sources who attended the meetings.

But all four – Frank Gygax, Nepmar Escalona, Simon Suarez and Eladio Perez – were escorted out of the building on Monday, according to four people with knowledge of their departures. Gygax declined to comment and the others did not respond to requests.

It is unclear whether Chavez has yet been formally terminated, an action that can only be taken by company directors, but he has been effectively shut out of the firm, Citgo employees said. Chavez did not respond to a request for comment.

Esser has essentially run the company since Chavez’ ouster, in close consultation with U.S. government officials, according to three Citgo employees and two people close to the incoming company board.

A Jan. 30 meeting between White House National Security Advisor John Bolton and Citgo executives thrust the low-key Esser into the spotlight after Bolton tweeted a photo of the meeting, calling it “very productive.”

U.S. officials have voiced concern that Guaido and his supporters had been too slow in seizing control of Citgo and also have pushed for a say in choosing members of the refiner’s new board – a request Guaido’s team declined, according to two people familiar with the talks.

Since clearing Citgo’s upper ranks of Maduro allies, Esser has focused on securing alternatives to the Venezuelan oil that feeds its refineries. Recent U.S. sanctions prevent the firm from importing Venezuelan crude after April 28, which could cripple the company unless it can ensure it has the cash, credit and contracts for alternate supplies.

Advisors to the incoming Citgo board have separately urged U.S. officials to exempt Citgo from sanctions and protect its assets from creditors once it is officially controlled by Guaido’s team.

Esser saw this crisis coming two years ago and put together a group to find new suppliers and test their oils in the event Venezuelan crudes were restricted by sanctions, according to a person familiar with the effort.

The firm’s efforts to sustain operations face a threat from creditors owed money by Venezuela and PDVSA, who could try to use that leverage to hamstring Citgo’s finances, said Carlos Jorda, a former Citgo chairman and now a Houston business consultant. The U.S. government could help the company hold off that threat, he said.

“The U.S. Treasury could say, ‘Hold your horses, you’ll get paid – but not paid by Citgo, but by Venezuela – when the Maduro regime exits,’” Jorda said.

Esser and Citgo finance executive Curtis Rowe traveled to Washington this week to meet with U.S. government officials for at least the second time in three weeks, according to two Citgo employees.Slideshow (2 Images)

‘FROGS AND SNAKES’

Opposition leaders had difficulty recruiting candidates willing to join the new Citgo board, according to three people familiar with the recruitments.

“There are many risks,” one of the people said, “and if these people have family members in Venezuela, they could be putting them at risk, too.”

In late 2017, six Citgo executives were called to Caracas and jailed amid a graft probe over a failed debt refinancing. Their detention led to Chavez’s appointment as CEO and the arrival of several Maduro loyalists at Citgo’s Houston headquarters.

New Citgo Chairwoman Palacios has been huddling with newly appointed directors and legal advisers to guard against the threat of a potential U.S. court challenge by PDVSA to the new board’s legitimacy, according to two sources close to her team.

Palacios and other board members, which include former Citgo and PDVSA executives living in the United States, did not respond to requests for comment.

One of their priorities will be to audit the finances of a refinery project in Aruba, said the two people close to Palacios. PDVSA and Citgo agreed to a $685 million overhaul of the idled facility in 2016, causing some Citgo executives to resign in protest, arguing the deal made no business sense.

On Monday, Citgo Aruba Refining officially put the money-losing venture on hold and laid off workers, citing the impact of U.S. sanctions on PDVSA. The project has been clouded by corruption allegations, according to four former and current Citgo employees and two people close to the new Citgo board.

“There is also worry about the audits to come. We are expecting ‘frogs and snakes’ to come from there,” said a Citgo employee, using a Venezuelan figure of speech similar in meaning to the opening of a Pandora’s box.

REDECORATING

Since Esser took over Citgo operations, the company has sent clear signals of a return to its century-old American roots.

“We the people of Citgo have a story to tell you” read an advertisement in Tuesday’s Washington Post, borrowing language from the U.S. constitution. The text emphasized the firm’s 6,000 U.S. workers, fiscal strength and U.S. charity work.

Workers at the company’s Houston headquarters also have purged the company website and marketing materials of references to PDVSA and stripped the building of the symbols of Venezuela’s socialist government.

For years, the hallways have been decorated with renderings of a controversial painting of Latin American independence leader Simon Bolivar that had been commissioned by former president Hugo Chavez – and looked more like Chavez than any historical Bolivar painting.

The portraits began to disappear, Citgo employees said, soon after Venezuela’s congress appointed the company’s new board of directors.