Source: RUSSELL GOLD and BEN CASSELMAN, WJS
========
Sharply lower energy prices are rippling through the oil industry, with Chevron Corp. warning Thursday of a decline in profit and oil-field services giant Schlumberger Ltd. laying off workers around the world.
Chevron said its earnings for the fourth quarter would be “significantly lower” than the previous period. The San Ramon, Calif., company said it will take “well above” $300 million in after-tax charges for the quarter and forecast a $625 million gain on an “asset-exchange transaction” but didn’t provide further details.
Schlumberger, meanwhile, said it plans to lay off about 1,000 workers in North America, or about 5% of its work force in the region. The company also is cutting some of its 65,000 overseas workers but said it doesn’t yet have exact figures. Halliburton Corp., Schlumberger’s largest rival, also said Thursday that it will cut jobs but provided no details.
Chevron’s warning notwithstanding, the company still is expected to report sizable earnings. Chevron, the second-largest U.S. based oil company by market value, behind Exxon Mobil Corp., reported a $7.9 billion profit in the third quarter, a period in which oil prices reached a record close of $145.29 a barrel.
Read more
U.S. Rep. Bob Latta (R., Bowling Green), who leaves tomorrow on a trip to Alaska to promote oil drilling on federal park lands, again yesterday called for a comprehensive energy strategy that would allow more use of oil, coal, and nuclear power.
Mr. Latta, a freshman congressman, said other countries, notably China and India, rapidly are building coal and nuclear plants while the United States is failing to make use of its coal resources and has not built a new nuclear power plant since 1996.
“The No. 1 issue is energy. If we don’t have energy this country is going to fall further and further behind in the world,” he said.
Tomorrow he joins a fact-finding trip from Washington to the Arctic National Wildlife Refuge in Alaska with 10 other congressmen, all Republicans.
Read more
Oil prices fell further today after slumping by more than $10 over the past two days on concern that slowing US economic growth would hurt crude demand, traders said.
New York’s main oil contract, light sweet crude for August delivery, dipped 42 cents to $134.18 a barrel, after slipping $4.14 yesterday.
That followed a dive of $6.44 on Tuesday, the sharpest daily decline since January 1991.
London’s Brent North Sea oil for September dipped 21 cents to $135.60. The Brent August contract expired yesterday down $2.56 at $136.19.
Prices have crumbled since striking record highs above $147 per barrel last Friday.
Losses accelerated yesterday after a bigger-than-expected rise in US crude reserves, analysts said.
Read more
Tombstone Exploration Corporation, the largest land holder in the Tombstone Mining District in Arizona, has started drilling at the Tombstone Silver Project.
The company has selected Layne Christensen, with its experienced staff and drilling equipment including 4×4 core rig, to drill the mine.
Encouraged with the initial findings from drill program, the company said that the drill hole TEMC-101 was designed to intercept two major silver-bearing manganese oxide structures of production. The hole is currently at 310 ft, just above the water table.
The company is using the triple tube technique to recover the maximum rock samples at the ore zones.
Read more
Last week saw Oxfam America, the U.S. arm of the well known international NGO to “promote the rights of communities impacted by oil, gas, and mining industries. According to Oxfam America, “too often, oil, gas, and mining projects don’t benefit people in countries that are rich in natural resources.†However, the idea that resource-rich countries do not benefit from projects to extract those resources is false.
Millions of people in the Persian Gulf region are living a lifestyle that they could never have attained had they not been born in resource-rich countries, which certainly take their share of oil & gas revenues.
While this may be an extreme example because of the relatively sparse population of the Persian Gulf states and the extraordinary bounty of oil & gas these states are sitting on, there are others.
Take Botswana, perhaps the most stable, least corrupt country in Africa, with the possible exception of South Africa. Why is the case? It is solely because of mining, conducted largely by international companies. Read more
Continental Airlines and Southwest Airlines, two of the healthiest major U.S. carriers, said Thursday that record-high fuel costs had led to disappointing quarterly earnings, and they lowered their growth plans.
Continental’s loss and Southwest’s decline in profit highlight the biggest challenges facing the airline industry – skyrocketing fuel prices and a sagging U.S. economy.
These were also contributors to the quarterly loss reported Wednesday by AMR, the parent of American Airlines.
Tough market conditions could also put pressure on Continental to take part in a merger to better compete with Delta Air Lines and Northwest Airlines, which said this week that they planned to combine to form the world’s largest airline by traffic volume.
Read more
Larry Elliott and Terry Macalister
The Guardian
Oil prices could hit $125 a barrel over the coming weeks amid fears of supply shortages and a continued fall in the value of the dollar, one leading investor said last night. The soaring price of crude, which reached another new record of $115 yesterday, has triggered a buyout scramble in the sector with oil services specialist, Expro International, announcing a £1.6bn takeover by Candover and other private equity groups.
T Boone Pickens, a veteran oilman who now heads the BP Capital hedge fund, said the cost of crude was moving to a substantially higher level after it touched $115.54 at one point in London trading.
Profit-taking later saw oil prices fall by a dollar to $114.53, but Pickens said the trend was for crude to go higher. “It will go up,” he said.
Read more