27th March 2015

Petrobras Nominates Vale CEO as Its Next Chairman – by Will Connors and Luciana Magalhaes (Wall Street Journal – March 27, 2015)

http://www.wsj.com/

Brazilian state-run oil company is in the midst of a widespread corruption scandal

RIO DE JANEIRO—Brazil’s government on Friday nominated the chief executive of mining giant Vale SA as the next board chairman of state-run oil firm Petroleo Brasileiro SA, disappointing those who were looking for sweeping changes at the oil company that has been devastated by a kickback-and-bribery scandal.

Murilo Ferreira’s nomination will be voted on at the next Petrobras shareholders meeting on April 29. If approved, as expected, he will succeed Guido Mantega, Brazil’s former finance minister, who has headed the Petrobras board since March 2010. The company on Thursday said that Luciano Coutinho, head of the country’s development bank, known as BNDES, will serve as interim chairman of Petrobras until next month’s board vote.

A career employee of Vale, which was state-owned until 1997, Mr. Ferreira is a trusted ally of President Dilma Rousseff. His appointment isn’t likely to shake up a board that has served as a rubber stamp for the policies of her ruling Worker’s Party, investors and analysts said.

Critics have faulted Ms. Rousseff for using the oil giant to advance her administration’s agenda, including forcing the company to subsidize fuel for consumers and do business with Brazilian suppliers, moves that have cost the oil giant billions. Read the rest of this entry »

posted in International Media Resource Articles, Iron Ore, Latin America Mining, Oil and Gas Sector-Politics and Image, Vale | 0 Comments

18th March 2015

New rail-car standards coming too slow, agency says – by Kim Mackrael (Globe and Mail – March 18, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA — Canada’s transportation watchdog is questioning a federal proposal to phase in tougher tank-car standards over the next 10 years, saying a recent spate of fiery derailments is evidence that faster action will be needed.

The Transportation Safety Board made the comments in a progress report on its investigation into a crude-oil train accident earlier this month in Northern Ontario. The TSB is investigating the derailment of a Canadian National train near Gogama, Ont., on March 7, which spilled crude oil into a nearby river and sparked a massive fire that burned for more than three days.

While investigators did not come to a conclusion on what caused the accident, they said they found a section of broken rail that had been installed two days before the accident. The rail was sent to a laboratory in Ottawa for further analysis, the report said.

All of the tank cars involved in the accident were built after 2011 and complied with the current CPC-1232 standard, the TSB report said. That means they had steel cladding at the front and protection over the valves – added safeguards that were not present on the earlier-model tank cars involved in the Lac-Mégantic disaster two years ago. Read the rest of this entry »

posted in Canadian Media Resource Articles, Mining Railway Issues, Oil and Gas Sector-Politics and Image | 0 Comments

18th March 2015

Pacific Future Energy proposes B.C. refinery for Alberta bitumen – by Brent Jang (Globe and Mail – March 18, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — The backers of a bitumen refinery project in northwestern British Columbia believe their made-in-B.C. recipe for getting oil out of landlocked Alberta will win over skeptics.

Other high-profile energy projects – such as Enbridge Inc.’s Northern Gateway pipeline – remain stalled amid widespread opposition in B.C., but officials at Pacific Future Energy say their solution is to build a refinery to address fears about tankers spilling oil into the Pacific Ocean.

While the Northern Gateway proposal calls for loading unrefined heavy oil into tankers for export from Kitimat, Pacific Future Energy is seeking to build an $11.4-billion (U.S.) refinery near Prince Rupert that would turn Alberta bitumen into products such as gasoline and diesel.

Stockwell Day, the former federal international trade minister who is now Pacific Future Energy’s senior adviser, argues that Enbridge isn’t able to win a social licence for Northern Gateway because the pipeline proposal is tainted by the risk of oil spills from Asia-bound tankers.

Pacific Future Energy is casting Enbridge as an Alberta-centric company that has underestimated British Columbians’ opposition to oil tankers. Read the rest of this entry »

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18th March 2015

Talisman Energy Inc, Nexen Energy ULC fire hundreds of employees in ‘bloody Tuesday’ – by Claudia Cattaneo and Geoffrey Morgan (National Post – March 18, 2015)

The National Post is Canada’s second largest national paper.

CALGARY – St. Patrick’s Day turned into “bloody Tuesday” in Calgary as major companies Talisman Energy Inc. and Nexen Energy ULC — both recently acquired by foreign operators — axed hundreds of employees, adding to the surge of energy sector jobs cut as a result of low oil prices.

Talisman, the international oil and gas producer that has been purchased by Spain’s Repsol SA, said 10% to 15% of its employees and contractors would be laid off this week, or about 150 to 200 of 1,300 Calgary head-office jobs that support its global operations.

“It’s a tough week, it’s a tough time for the industry, and the reality is that no oil and gas company is immune to low commodity prices,” said Brent Anderson, spokesman for Talisman.

Nexen, a subsidiary of China’s CNOOC Ltd., also announced 400 job cuts – 300 of them in Calgary. The job losses represent 14.5% of the company’s total Canadian head count.

“A decision was made to conduct a thorough review of our organization to ensure our long-term viability and sustainability,” CEO Fang Zhi said in a statement. “While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program. We take these decisions seriously, and all impacted employees have been treated fairly and with respect.” Read the rest of this entry »

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12th March 2015

Saudis, frackers big stakeholders in oil price war – by Gwynne Dyer (Elliot Lake Standard – March 11, 2015)

http://www.elliotlakestandard.ca/

I’m in Alberta, the province that produces most of Canada’s oil, and there’s only one question on everybody’s lips: How long will the oil price stay down?

It has fallen by more than half in the past nine months — West Texas Intermediate closed at $48.29 US a barrel Wednesday — and further falls are predicted for the coming weeks.

This hits jobs and government revenues hard in big oil-producing centres like Alberta, Texas and the British North Sea, but its effects reach farther than that. “Clean” energy producers are seeing demand for their solar panels and windmills drop as oil gets more competitive.

Electric cars, which were expected to make a major market breakthrough this year, are losing out to traditional gas-guzzlers that are cheap to run again. Countries that have become too dependent on oil revenues are in deep trouble, such as Russia (where the rouble has lost half its value in six months) and Venezuela.

Countries like India, which imports most of its oil, are getting a big economic boost from the lower oil price. So how long this goes on matters to a great many people. The answer may lie in two key numbers. Saudi Arabia has $900 billion in cash reserves, so it can afford to keep the oil price low for at least a couple of years. Read the rest of this entry »

posted in Northern Ontario/Canada Regional Media, Oil and Gas Sector-Politics and Image | 0 Comments

2nd March 2015

Republicans need to make it clear that Keystone will help end U.S. dependence on Mideast oil – by Ted Morton (National Post – March 2, 2015)

The National Post is Canada’s second largest national paper.

What do American Sniper, Chris Kyle and the Keystone XL pipeline have in common? Most Americans would probably say “nothing.” Unless that changes soon, U.S. President Barack Obama and the Democratic minority in Congress will succeed in sustaining the veto over Keystone that Obama exercised last week.

If the Republicans want to win this battle, they have to change their message. The Keystone pipeline is not about creating more jobs over the next three years, but about saving more lives over the next three decades — lives of young Americans being sent to the Middle East to defend America’s security of supply of imported OPEC oil.

The recent collapse of oil prices and availability of cheap gasoline have made it easy for Americans to forget how dependent on Middle East/Arab oil the U.S. and its allies still are. Thanks to the shale revolution of the past decade, U.S. oil production has risen three-million barrels per day (b/d) to 8.5-million b/d. But American consumption of oil is still double this amount, so the Americans are still importing 7.6-million b/d. While more and more of this is now coming from Canada — over three-million b/d — most of it still comes from the Middle East.

U.S. shale oil is not going to change this. Contrary to what most Americans may assume, OPEC’s share of global oil production has actually risen since 1985 from 30% to 39%. And OPEC’s share of global production is projected to continue to increase to 49% by 2040. Read the rest of this entry »

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26th February 2015

On Keystone, the Conservatives made one fatal blunder – by Tasha Kheiriddin (National Post – February 26, 2015)

The National Post is Canada’s second largest national paper.

Between price drops and presidential vetoes, Canada’s oil-fuelled future is looking more and more like a mirage. The latest blow came on Wednesday, when U.S. President Barack Obama vetoed Congress’ endorsement of the Keystone XL Pipeline. Obama’s letter to the Senate was both fulsome and blunt: “Because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest — including our security, safety, and environment — it has earned my veto.”

The move was not unexpected. For years, the White House had repeatedly delayed its decision on the project. In an interview given to The New York Times in July 2013, Obama pooh-poohed Keystone’s job-creation potential, and warned that he would insist that environmental standards be the ones that prevailed. And now, with crude prices hitting rock-bottom, oil sands projects shutting down, and U.S. petroleum inventories growing, it’s hard to argue the pressing need to pipe in more oil from Canada.

Why did this happen? It’s not like Canada didn’t try: The federal government threw everything at the Keystone file. Yet despite heavy lobbying by Ottawa and Alberta, despite the fact that Canada produces “ethical” oil untainted by gross human rights violations, despite our nation’s military engagement in Afghanistan and now Iraq, despite paying for the U.S. customs plaza at the new Windsor-Detroit bridge, in short, despite being a damn good neighbour, friend and ally, all Canada got is a sharp stick in the eye.

Through all this, however, the Conservative government made one fatal blunder: It underestimated the importance of the environment to the Obama presidency. Read the rest of this entry »

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25th February 2015

Obama’s veto of Keystone XL bill is a slap in Canada’s face – by Claudia Cattaneo (National Post -February 25, 2015)

The National Post is Canada’s second largest national paper.

U.S. President Barack Obama made good Tuesday on his threat to veto a bill to approve the Keystone XL pipeline, maintaining under his full control the final decision on the Canadian project’s future.

His office downplayed the gesture, only the third veto of his presidency. There was to be no “drama or fanfare around it,” said White House press secretary Josh Earnest.

It’s “certainly possible” that Obama will approve the pipeline once a State Department review of the project is completed, he added, though he gave no deadline for a decision.

Yet the move is another slap in the face to Canada, which has championed the pipeline for years and did everything by the book to get it approved, only to be led down the garden path, through a maze of roadblocks and traps, by its supposed best friend and ally.

“I think you should take this personally,” said Matt Koch, vice-president at the U.S. Chamber of Commerce’s Institute for 21st Century Energy. Read the rest of this entry »

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24th February 2015

Commodity crash reflects global economic slump – by Brent Jang (Globe and Mail – February 24, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy.

While crude oil’s price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.

The commodity crash is the result of too little demand for raw goods now in plentiful supply after producers ramped up capacity in recent years in anticipation of steady global growth.

But trouble spots are everywhere. Commodity markets have declined during worldwide turbulence as the pace of growth in China continues to slow, Russia grapples with an imploding economy and ruble and Greece struggles through an economic crisis that Europe must solve. Oil’s big drop has hurt many energy-producing countries, including Canada, where low prices are hammering Alberta and reducing growth for Canada as a whole. Read the rest of this entry »

posted in Canada Mining, Canadian Media Resource Articles, Commodity Super-Cycle, Oil and Gas Sector-Politics and Image | Comments Off

12th February 2015

Eagle Spirit pipeline plan obtains ‘licence’ as B.C. First Nations chiefs sign on to project – by Claudia Cattaneo (National Post – February 12, 2015)

The National Post is Canada’s second largest national paper.

Just as proposed bitumen pipelines through British Columbia seemed hopeless because of widespread opposition, backers of the aboriginal-led Eagle Spirit pipeline plan announced a major breakthrough Wednesday. The group has solid support from the province’s First Nations for its $14-billion-to-$16-billion project linking Alberta’s oil sands to the West Coast and an invitation to the oil community and the Alberta government to get on board.

What made the difference? The one million barrel-a-day pipeline plan, plus a possible refinery that would cost extra, started with getting First Nations involved, offering them a large equity stake, and obtaining their ‘social licence.’ There were also growing concerns about transportation of oil by rail, which aboriginals see as inevitable if oil pipelines aren’t built. And there was encouragement from Alberta First Nations familiar with resource development and benefiting from the oil sands business.

“We are very cognizant of how important this is to Canada, and Alberta in particular, and we have a solution,” Calvin Helin, chairman and president of Vancouver-based Eagle Spirit Energy Holdings Ltd., and a member of the Tsimshian First Nation in northwestern B.C., said Wednesday at a news conference in Calgary. “The chiefs came out today to say they are prepared to be partners.” Read the rest of this entry »

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5th February 2015

TransCanada CEO says Canada needs to resolve conflicts over pipelines – by Jeff Lewis (Globe and Mail – February 5, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY — Canada’s push to become a global resource powerhouse is at risk of failing unless government leaders take action to resolve the many conflicts holding up key projects, the head of the company behind the Keystone pipeline says.

TransCanada Corp. chief executive officer Russ Girling said Wednesday that Canada faces fundamental choices about the future of the country’s economy, including questions around aboriginal relations, resource extraction and pipeline development.

Those issues have pitted industry against opponents, transforming once-staid pipeline hearings into a forum for oil sands critics. Meanwhile, infrastructure projects are shouldering long-standing aboriginal grievances with the federal government, Mr. Girling said in a meeting with The Globe and Mail’s editorial board.

“We’ve got to quit the little bickering that goes on between us and get to the bigger picture and let the institutions that we charge with managing the public good get on with doing their job,” he said.

His comments point to the growing frustration in the energy sector as Alberta’s oil patch braces for an extended slump due to the dramatic plunge in crude prices. Read the rest of this entry »

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28th January 2015

Provinces making bad bets with resource-based budgets – by Brian Lee Crowley (Globe and Mail – January 9, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

You can’t say you weren’t warned. That’s a message that should be posted on billboards opposite the premier’s office in Edmonton, St. John’s and various other provincial capitals where falling energy prices have devastated government budgets.

Those of us who care about such things have been repeating for years the wisdom best summed up by former Alberta treasurer Jim Dinning: “Non-renewable natural resource revenues are non-reliable revenues.”

When your provincial budget is the attic in a house of cards, the first breath of contrary wind brings the whole structure tumbling down. I remember when a 10-cent difference in the price of natural gas meant a swing of $142-million in Alberta’s revenues. The price of that commodity has of course gyrated all over the place in the past 20 years, but mostly in a direction that has caused apoplexy at budget time.

The volatility of natural resource revenues is far less interesting than what might be done about them. On the other hand, if you can’t get policy makers to grasp the fragility of their budgets, you will never get them to take the hard decisions necessary to put things on a sounder footing. Read the rest of this entry »

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27th January 2015

The petro plunge will be painful, but we will adapt – by Stephen Gordon (National Post – January 27, 2015)

The National Post is Canada’s second largest national paper.

Oil prices have fallen, and our economy will have to adjust. This prospect may alarm many, but Canada has had to adjust to similar shocks throughout its history. The Canadian economy altered its structure in order to take advantage of higher resource prices, and part of that shift will now have to be undone.

There’s no point in pretending that this is anything but a negative shock, but it is possible to overstate the bad news. Firstly, the change in the Canadian economy over the past decade has often been overstated, and sometimes wildly exaggerated. Secondly, the ability of the Canadian economy to adjust is not well-enough appreciated.

No one will be surprised to learn that higher oil prices spurred more oil production, but the increase was surprisingly modest: The average growth rate of after the 2002 was 3.6%, compared to 2.6% during the preceding 12 years. But since other sectors have been growing even faster, the oil and gas sector’s share of GDP declined from 6.4% in 2002 to 6% in 2014.

Its share of employment has increased, but is still only 1.7% of the total. Claims to the effect that Canada has become a “petro state” or that its economy is largely dependent on oil simply do not mesh with the facts. As far as output and employment are concerned, the Canadian economy of 2015 is surprisingly similar to what it looked like in 2002. Read the rest of this entry »

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27th January 2015

Pacific Future Energy Corp eyes ‘money left on the table’ for $11-billion refinery project in B.C. – by Yadullah Hussain (National Post – January 27, 2015)

The National Post is Canada’s second largest national paper.

TORONTO – The company proposing a $11-billion heavy oil refinery in British Columbia is pushing ahead with the project despite market volatility and is seeking $25-million in financing, according to its chairman, Samer Salameh.

“We are raising $25 million and that would take us to the permitting process, which would take two to three years,” Mr. Salameh, chairman of Pacific Future Energy Corp., said in an interview Monday on the sidelines of a speech to a business audience in Toronto. “We are down to finalizing two sites on the B.C. Coast, and we will be filing for an environmental assessment by the end of this year.”

Mr. Salameh previously managed the U.S. business interests of Mexico’s Carlos Slim, the second-wealthiest investor in the world, according to Forbes magazine. The management team includes Stockwell Day, a former federal minister for the Asia-Pacific Gateway, and Shawn A-in-chut Atleo, a former national chief of the Assembly of First Nations. Mark Marissen, a political strategist and former-husband of B.C. Premier Christy Clark, is also part of the team.

The company has ambitious plans to build the world’s “near net-zero carbon emission facility and the cleanest refinery in the world,” powering it with natural gas and renewable to reduce emissions by 40%. Carbon-capture technology will further reduce emissions by 52%, the company claims. Mr. Salameh said the technology is “proven,” but admits that it will be the first greenfield refinery of its kind in the world. Read the rest of this entry »

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23rd January 2015

Harper says there’s more to the Canadian economy than oil – by Bill Curry (Globe and Mail – January 23, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Ottawa — Stephen Harper is playing down the impact of energy on the overall Canadian economy, noting that other sectors will help keep growth strong during hard times for the oil patch.

The Prime Minister, who has previously promoted Canada abroad as an emerging energy superpower, stressed the importance of small business, manufacturing and innovation during an event in St. Catharines, one of many Southwestern Ontario communities that have lost manufacturing jobs in recent years.

“It’s obviously significant for the Canadian economy, particularly certain sectors and regions, but the oil industry isn’t remotely the entire Canadian economy,” said Mr. Harper. “There are many benefits to other parts of the economy because of these developments and although the oil industry in those regions are going to face some pretty significant adjustments, the fact of the matter is that this is a resilient industry that knows that prices go up and down.”

The Prime Minister’s comments, which followed an announcement to expand a program for small-business loans, marked his first public response since Bank of Canada Governor Stephen Poloz shocked markets Wednesday by cutting interest rates in response to lower-than-expected growth and inflation. Read the rest of this entry »

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