The price of Brent Crude, the global benchmark for oil, has fallen below $50 per barrel for the first time in six years.
The price of oil is expected to fall further as North American shale producers continue to supply increasing quantities of oil and gas, and the oil-producing group OPEC resists calls for cuts in production to support prices.
New supply has entered the market and increased production is coming primarily from Russia and Iraq,
Oil producing countries have been hit as the price of their main export falls.
Technip said in a statement it had put forward “a number of alternative options to a tender offer” in discussions with CGG but failed to reach a deal.
“Under these circumstances, Technip informs the market that it does not intend to file a tender offer for CGG,” the company said.
On November 10, 2014 Technip approached CGG’s Board of Directors with a view to making an offer on CGG and sought to engage in a constructive dialogue with CGG to review this project. Further to press leaks, Technip set out the main elements of its industrial project in a press release on November 20, 2014.
Following CGG’s reaction to this approach, Technip put forward a number of alternative options to a tender offer, taking care as always to consider the social, strategic and financial aspects in each case. However, the discussions of these options did not result in any form of agreement.
Oil giant BP is accelerating plans to cut hundreds of jobs within its back-office departments – many of them based in the UK and US.
“Oil is concentrating minds on making the organisation more efficient and the right size for the smaller portfolio we have now,” BP said.
Crude prices have fallen by almost 40% this year, reducing oil firms’ margins.
Brian Gilvary, BP’s chief financial officer, told the Sunday Times: “We have got flexibility in our programme to trim into next year if that’s what we need in a new world of oil at $70 or $60, or whatever the number is.”
The company, which has been downsizing since the oil spill in the Gulf of Mexico in 2010, said it had long planned the cuts, but is speeding up the process due to falling oil prices.
Schlumberger, the world’s largest oil services group, is cutting back its fleet for offshore geological surveys and taking an $800m writedown on the value of its ships, in the first significant cutback in the industry following the recent fall in crude prices. It is also taking a $200m charge in the fourth quarter for the planned job cuts.
WesternGeco, Schlumberger’s UK-based marine seismic business, will cut its fleet from 23 vessels at the end of last year to 15 at the end of 2014, through retiring some of the older and higher-cost boats and converting others.
Schlumberger shares have fallen 21 per cent in the last few months.
Read more at FT.com
President Vladimir Putin said on Monday that Russia would stop construction of the South Stream gas pipeline, shelving a strategically important project that Moscow was counting on to cement its influence in south-eastern Europe.
The project would have brought Russian gas to Bulgaria under the Black Sea, bypassing Ukraine. But the European Commission has refused to give Gazprom the exemption it would need to operate the pipeline at full capacity, viewing it as a potential further tool for the Kremlin to exert economic control over southern and eastern Europe.
South Stream is so far the biggest casualty of the stand-off between Russia and Europe over Moscow’s military involvement in Ukraine. The South Stream decision comes as Russia turns East, working furiously to build the infrastructure to sell its gas to other markets, especially China.
Mr Putin has granted Turkey a 6 per cent price cut on Russian gas from January 1. Russia will also increase supplies, making Turkey heavily reliant on Russian natural gas.
In contrast to Turkey’s move, the EU has been taking measures since 2010 to reduce its dependence on Russian gas. With the events in Ukraine, European Energy Security is no longer simply about bypassing Ukraine as the key transit state for Russian gas. The EU also wants “diversification of source of supply”.
The Russian rouble has sank to the lowest point in its history, above 50 Roubles to the dollar.
It’s down 5.27% against the US currency on Monday alone. The dollar is about 50% stronger against the rouble than it was at the start of 2014.
The fall in oil prices has dramatically weakened the Russian currency, which had been much more stable over the previous three years.
Brent crude is down to just $68, and the other major benchmark of oil prices, West Texas Intermediate (WTI), is down to just $65, a five-and-a-half-year low.
People walk past a display with currency exchange rates in central Moscow, Russia, Monday, Dec. 1, 2014. Russia’s ruble hit a new all-time low on Monday, dropping more than 3 percent as declining oil prices and the conflict in eastern Ukraine are weighing in on the Russian economy. The Russian currency traded 52 rubles against the dollar at the opening on Monday after shedding 15 percent in the previous week. The ruble was also down 2 percent against the euro. (AP Photo/Alexander Zemlianichenko)
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http://www.daytondailynews.com/ap/ap/top-news/russian-ruble-takes-a-nosedive-as-oil-price-drops/pCTYP9/
Saudis block OPEC output cut, sending oil price plunging.
(Reuters) – Saudi Arabia blocked calls on Thursday from poorer members of the OPEC oil exporter group for production cuts to arrest a slide in global prices, sending benchmark crude plunging to a fresh four-year low.
Brent oil fell more than $6 to $71.25 a barrel after OPEC ministers meeting in Vienna left the group’s output ceiling unchanged despite huge global oversupply, marking a major shift away from its long-standing policy of defending prices.
OSLO–Norwegian oil services company Seadrill Ltd on Wednesday said it would suspend dividend payments and cut its debt after reporting a fall in third-quarter net profit, citing a deterioration in offshore drilling and financing markets.
Net profit totaled $149 million, or $0.31 a share, down from $286 million in the corresponding quarter last year.
“The decision to suspend the dividend has been a difficult decision for the board. However, taking into consideration the significant deterioration in the broader offshore drilling and financing markets over the past quarter, the board believes this is the right course of action for the company,” said Seadrill chairman John Fredriksen.
Oil prices tumbled on Tuesday 25 November 2014 ahead of a meeting of oil cartel OPEC where a cut in production will likely be discussed.
U.S. crude lost $1.69 to settle at $74.09, its lowest close since September 2010.
Brent crude was last trading at $78 a barrel, down $1.40, after rising to as much as $80.44 earlier.
Ministers from the Organization of the Petroleum Exporting Countries (OPEC) were gathering in Vienna for a meeting on Thursday to agree how to respond to a collapse in oil prices, which have fallen by almost a third since June.
Petrofac has warned investors that a “difficult period” involving troubled North Sea projects and lower oil prices is likely to reduce its net profit to $500m next year, 25 per cent lower than analysts’ consensus expectations of $675m.
Shares in the FTSE 100 oilfield services company plunged 26 per cent on Monday to 882p after it outlined a series of development difficulties.
Much of the $175m reduction in 2015 profit guidance relates to Petrofac’s integrated energy services division, which takes on riskier projects, and was previously seen as a key driver of earnings growth under the leadership of Andy Inglis, a former BP executive who left Petrofac to head-up of Dallas-based oil explorer Kosmos Energy.
Read more at ft.com
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