19th December 2014

‘There will be some blood’: Will Canada’s oilpatch be able to withstand the price onslaught? – by Yadullah Hussain (National Post – December 19, 2014)

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

There will be bloodletting and pain as the impact of low oil prices reverberates through the Canadian oilpatch, but the industry is entering the downturn from a position of strength, according to analysts.

“There will be some blood on the streets, but if companies can keep their cash to debt ratios down below three times or in some cases four times at least they are not facing a bankruptcy-type position,” said Jeremy Kaliel, executive director, institutional equity research at CIBC World Markets Inc.

The dramatic decline in oil prices has caught the industry off guard, leaving companies scrambling to cut capital expenditures and dividends and redrawing their 2015 plans.

The U.S. oil and gas industry is already feeling the heat as much of the shale boom was fuelled by a diet of cheap debt that looked affordable at US$100 per barrel. With U.S. crude now edging towards US$55, investors have fled.

“Some of these companies have up to 75% of their market cap wiped out,” said Rick Chamberlain, managing director at Houston-based Berkeley Research Group. “The ones that leveraged didn’t make the right financial decisions.” Read the rest of this entry »

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

17th December 2014

Why Talisman Energy Inc is the first — but not last — victim of the oil price slump – by Claudia Cattaneo (National Post – December 17, 2014)

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

Senior oil and gas producer Talisman Energy Inc. became the first Canadian oil patch company to surrender to the global oil price crash Tuesday, when it announced its sale to Spain’s Repsol SA for US$8.3 billion in cash after a long campaign to re-focus its global business.

There will be more.

With share prices at garage-sale levels, the whole Canadian energy sector is vulnerable to being picked on by anyone with a war chest, expectations of an oil price recovery or better ideas on how to create value.

“The likelihood for high-profile M&A transactions is almost a guarantee,” said Sonny Mottahed, CEO and managing partner of Black Spruce Merchant Capital in Calgary. “In the environment that we are in today, where you have equity prices reacting dramatically to the drop in the commodity … the intrinsic value of a lot of these companies is far greater than what the market is valuing them at.”

In anticipation of more consolidation, investors pushed up many battered Canadian energy names, with Encana Corp. bouncing 7.4% to close at $14.53, Crescent Point Energy Corp. gaining 10% to close at $24.13; Baytex Energy Corp. gaining 5.7% to $16.21, and Whitecap Resources Inc. gaining 5.4% to $10.99. Read the rest of this entry »

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

16th December 2014

A new cold war: Denmark gets aggressive, stakes huge claim in Race for the Arctic – by Tristin Hopper (National Post – December 16, 2014)

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

For years, the Race for the Arctic had promised to be one of the most gentlemanly land grabs in history: Using only science and a whiff of diplomacy, the oil-rich Arctic Ocean could be peacefully divvied up between Russia, Canada, the United States and Europe.

That is, until the tiny nation of Denmark approached the United Nations on Monday with a staggering claim to nearly one third of the total prize — including the North Pole.

“It is ironic that the only country that right now could be said to be acting provocatively in the Arctic is Denmark,” said Michael Byers, the Vancouver-based author of Who Owns the Arctic? speaking to Danish media on Monday.

Canada has not yet wrapped up its final claim to areas of the Arctic Ocean now considered international waters, although Ottawa has vowed to shoot for 1.2 million square kilometres of ocean, including the North Pole. There is no definitive scientific evidence that Canada has any claim to the North Pole, but that did not stop Citizenship and Immigration Minister Chris Alexander from issuing Santa Claus with Canadian citizenship last year.

On Monday, Rob Huebert at the University of Calgary’s Centre for Military and Strategic Studies called Denmark’s claim evidence that it was wrong to ever believe that the Arctic could be divvied up simply with geological data. Read the rest of this entry »

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

16th December 2014

Falling oil price puts Ottawa’s surplus at risk – by Bill Curry (Globe and Mail – December 16, 2014)

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 — Finance Minister Joe Oliver is acknowledging the dramatic drop in oil prices will take a further bite out of government revenues, making Ottawa’s previously declared surplus less certain.

The government already shaved billions off of its revenue forecasts when it released a fiscal update on Nov. 12, when the price of North American crude was around $81 (U.S.). That price closed Monday below $56.

As the price of oil continued to slip after his fiscal update, Mr. Oliver initially maintained that these adjustments were conservative enough to capture lower prices without affecting Ottawa’s bottom line. But he said Monday the further drop will have an impact.

“We’re not about to come out with a number at this point. However, we’re confident we will achieve a budgetary balance next year,” he said Monday, before a meeting of provincial and territorial finance ministers in Ottawa.

The government is forecasting a surplus of only $1.6-billion, which would be at risk of slipping into deficit territory should oil prices stay low. Ottawa has set aside $3-billion for unforeseen events, and several economists said Monday that should be enough to maintain a small surplus. Read the rest of this entry »

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

15th December 2014

Oil, coal and iron ore at financial crisis levels – by Henning Gloystein (Reuters India – December 15, 2014)

http://in.reuters.com/

SINGAPORE – (Reuters) – Tumbling oil, coal and iron ore prices are now all at levels last seen during or before the financial crisis of 2008/2009, signalling not only the impact of a glut of supplies but deeper weakness in parts of the global economy, analysts say.

The raw materials are among the most sensitive to economic health, with oil and coal the world’s two most important energy sources and iron ore used to make steel.

Brent crude prices have almost halved since June to slightly above $60 a barrel, a level last seen in early 2009 during the financial crisis. In the coal market, the benchmark European futures contracts has dropped below $70 a tonne to levels comparable before the boom and bust of 2007-2009.

Iron ore prices have halved to under $69 a tonne as demand growth in the biggest market, China, wanes. Analysts initially pointed to rising oil and mining output, as well as energy efficiency and alternative sources such as renewables, as the main factors behind the drops.

But with no end to the price slide, it became apparent that a significant cooling of emerging economies as well as ongoing slack in developed markets such as Europe and Japan was also at play, especially after oil producer club OPEC said it would not cut output in support of prices.

“Softer global demand, coupled with unprecedented growth in supply are weighing on global oil indices, with prices falling to levels not seen since the Global Financial Crisis,” National Australia Bank said in a note on Monday. Read the rest of this entry »

posted in Coal, International Media Resource Articles, Iron Ore, Oil and Gas Sector-Politics and Image | 0 Comments

15th December 2014

The Saudi standoff: Oil-rich nation takes on world’s high-cost producers – by Shawn McCarthy and Eric Reguly (Globe and Mail – December 13, 2014)

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 and AL KHOBAR, SAUDI ARABIA – In the high-stakes contest between the United States, the biggest shale oil producer, and Saudi Arabia, the biggest oil exporter, America has blinked first.

The OPEC refusal to cut production at its November meeting was widely seen as the declaration of a price war against booming U.S. shale oil producers, which had sent their country’s oil production soaring. Saudis had watched as their market share dropped precipitously in the world’s biggest oil-consuming nation, and they wanted to send a clear message across the global energy market that they weren’t about to back off.

Oil prices have been in freefall ever since. Brent crude, the global oil benchmark, sank another 3 per cent Friday to $61.85 (U.S.) a barrel, while West Texas intermediate, the U.S. benchmark, dropped 3.6 per cent to $57.81, extending its slide from well over $100 a barrel in the summer.

If the global oil standoff pits the industry stalwart Saudi Arabia against the surging U.S. rival, other global players are coping with the pricing fallout, including Canada. Oil companies around the world are being forced to revisit their spending and production plans for 2015, and in the offices towers of downtown Calgary, those changes are already well under way.

Cenovus Energy Inc. this week slashed its capital budget by 15 per cent and signalled more to come. Canadian Natural Resources Ltd. has said a quarter of its $8.6-billion (Canadian) budget is “flexible” and could be deferred if prices don’t recover. Read the rest of this entry »

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

12th December 2014

Build refineries with money, not bitumen – by Andrew Leach (The Globe and Mail – December 12, 2014)

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.

Andrew Leach is the Enbridge Professor of Energy Policy at the University of Alberta.

Albertans own the resource. Given how the cost of oil sands production has increased over the past decade, most economists would agree that we’re likely dissipating rents through a too-rapid pace of development. For projects such as Imperial Oil’s Kearl, the impact of multibillion-dollar cost-overruns will be softened by lower future tax and royalty payments.

Others, such as Suncor, paid only 7.4 per cent of gross revenues from oil sands operations in royalties to the province in 2014. Albertans should ask whether we are taking on more risk than we should and whether we’re giving away our bitumen to drive economic activity.

We could slow the pace of development and increase the effective charges on oil sands by requiring companies to build refineries or upgraders, or we could charge them more for access to the resource. It’s the preference for the former which I’ve never understood: Why tax via demands to build refineries companies would otherwise not build? Why not simply take a larger share in cash, and deploy the cash toward the construction of things we’d likely value more – such as hospitals and schools, or toward rebuilding the Alberta Heritage Fund?

Alberta has, in effect, already made the decision to do the opposite – to use government revenues to build a refinery. Read the rest of this entry »

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

11th December 2014

Why OPEC still has oil markets over a barrel – by Yadullah Hussain (National Post – December 11, 2014)

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

The oil-importing world has long hoped that the Organization of Oil Exporting Countries — a union of countries often at odds with each other — will fall apart and usher in an era of free-market oil.

OPEC’s decision at its November meeting to maintain output at 30-million barrels per day has once again raised the age-old speculation that the 12-member group featuring Saudi Arabia, Iran, Venezuela and Iraq, among others, has become ineffective.

“With oil having to ‘balance itself’ going forward, OPEC has given up on its traditional role of keeping supply and demand in check,” said Francisco Blanch, commodity strategist at Bank of America Merrill Lynch in a report. “The cartel is now effectively dissolved.”

Hold the champagne. Since the 1970s the group’s recalcitrant members have lurched from one oil episode to the next and have a long tradition of holding acrimonious meetings that seem to be their last. Often those meetings have not yielded the desired results, either.

The dysfunctional group has survived bloody wars between member countries (Iraq and Iran; Iraq and Kuwait), overcome US$9 per barrel oil in the late 1990s, and managed to hold regular meetings even as Saudi Arabia and Iran engage in proxy wars for regional influence. Read the rest of this entry »

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

11th December 2014

Perry Bellegarde, fiery new AFN grand chief, will ‘reach out’ for larger share of resource revenues – by Mark Kennedy and Richard Warnica (National Post – December 11, 2014)

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

Perry Bellegarde, elected grand chief of the Assembly of First Nations on Wednesday and the now the most powerful native politician in Canada, has spent the last 16 years honing a single, unambiguous message.

To paraphrase another prairie politician who hit it big on the national stage, in Mr. Bellegarde’s view, the First Nations want in.

A career politician and longtime regional chief from Saskatchewan, Mr. Bellegarde has long argued for a broader interpretation of treaty rights, one that would see First Nations earn a much larger share of resource revenues and jobs.

In a fiery first speech as grand chief Wednesday, Mr. Bellegarde doubled down on that theme. “To the people across this great land, I say to you, that the values of fairness and tolerance which Canada exports to the world, are a lie when it comes to our people,” he said.

“Canada will no longer develop pipelines, no longer develop transmission lines, or any infrastructure, on our lands as business as usual. That is not on.”

His final remarks drew one of the loudest responses from the crowd: “Canada is Indian land,” he said. “This is my truth and this is the truth of our peoples.” Read the rest of this entry »

posted in Aboriginal and Inuit Mining, Canada Mining, Canadian Media Resource Articles, Oil and Gas Sector-Politics and Image | 0 Comments

10th December 2014

Exxon sees abundant oil, gas far into future – by Jonathan Fahey (Blomberg News – December 09, 2014)

http://www.businessweek.com/

NEW YORK (AP) — North America, once a sponge that sucked in a significant portion of the world’s oil, will instead be supplying the world with oil and other liquid hydrocarbons by the end of this decade, according to ExxonMobil’s annual long-term energy forecast.

And the “almost unspeakable” amount of natural gas found in recent years in the U.S. and elsewhere in North America will be enough to make the region one of the world’s biggest exporters of that fuel by 2025, even as domestic demand for it increases, according to Bill Colton, Exxon’s chief strategist.

“The world has such an improved outlook for supplies,” Colton said in an interview. “Peak oil theorists have been run out of town by American ingenuity.”

In a forecast that might make economists happy but environmentalists fret, Exxon’s two chief products, oil and natural gas, will be abundant and affordable enough to meet the rising demand for energy in the developing world as the global middle class swells to 5 billion from 2 billion and buys energy-hungry conveniences such as cars and air conditioners.

This is a result of advances in drilling technology that have made it possible for engineers to reach oil and gas in unconventional rock and extreme locations and quieted talk that the world was quickly running out of oil. Read the rest of this entry »

posted in International Media Resource Articles, Oil and Gas Sector-Politics and Image | 0 Comments

9th December 2014

TSX suffers worst day in 18 months as oil prices keep tumbling – by David Berman (Globe and Mail – December 9, 2014)

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.

Declining crude oil prices are taking a brutal toll on the Canadian stock market, as investors take a dim view of the country’s economic prospects in an era of cheap, plentiful energy.

The benchmark S&P/TSX composite index fell 329.50 points or 2.3 per cent, to 14,144.17, marking its worst stumble in about 18 months.

At its lowest point during the day, the index was down as much as 490 points. The Canadian dollar fell to another five-year low of 87.10 cents (U.S.), down more than a third of a cent and offering another signal that investors are growing increasingly pessimistic about all things Canada.

The latest setback certainly ramps up the drama surrounding the commodity-exposed Canadian market, but it also continues a painful downturn that has persisted for more than two weeks.

The benchmark index has fallen a total of 6.4 per cent since Nov. 21 – eroding its year-to-date gain to just 3.8 per cent as investors ponder where oil is ultimately headed and what the repercussions will be.

The price of oil has retreated to five-year lows amid evidence that the world is producing more crude than the global economy can consume. Read the rest of this entry »

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

8th December 2014

Has the environmental movement ever seen a collapse it didn’t want to be on the brink of? – by Rex Murphy (National Post – December 6, 2014)

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

The most important thing to understand about an environmental concern is that it is infinitely malleable. It has Play-Doh’s or putty’s wonderful power of accommodation, to take whatever shape, for the moment, might be called for.

Because the environment is, by definition or tautology, everything that is around us — there will always be something “in” the environment on which to hang an objection, mount a protest or, as Samuel Johnson, ever elegant, put it, “to point a moral, or adorn a tale.”

Thus I was not surprised that when the debate on pipelines recently shifted from oil flowing west to oil flowing east, someone raised the fate of the “endangered beluga whale.” We may not have known specifically that it was going to be the beluga, but we surely knew that something was going to be endangered — smelt, toad, turr, or the infamously myopic blundering owl.

The precise animal doesn’t matter; we knew it would be something. I think, in fact, it was probably — there is a batting order, so to speak, in this business — the beluga’s turn.

I should be explicit, I suppose, and declare there was no intention of putting belugas in the actual pipeline, a self-defeating project for all concerned. (Check Wiki, under “plugs.”) Rather, the alarm was raised over the building of a terminal for the pipeline at Cacouna, Que., and immediately on hearing that siren the company proposing the pipeline, naturally, stood down. Read the rest of this entry »

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

8th December 2014

Why the bottom falling out of oil isn’t all bad – by David Rosenberg (National Post – December 6, 2014)

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

It’s been quite a while since the cartel has sat idly by in the face of a collapse that knocked almost 40% off the price of oil, but that is exactly what happened at last week’s meeting in Vienna. It had been widely assumed that OPEC would need to cut output by between 1 and 1.5 million barrels per day to establish a floor under the price; some were hoping for it to ride to the rescue as it did in fashion at the 2009 lows — different price, different time.

Basically, Saudi Arabia has intimated that the first production cuts in support of the price are going to have to come from somewhere else — as in, the U.S. shale operators, and it will no longer shoulder the burden of adjustment alone (indeed, after a month in which U.S. shale production surged more than 3%).

The UAE’s oil minister, Suhail Al Mazroui, didn’t exactly mince words after the meeting: “There is oversupply, but this is not an OPEC problem,” with the hint being America’s role in pushing prices down to new four-year lows.

This is a serious change in the cartel’s reaction function and it would be dangerous to underestimate the repercussions of OPEC relinquishing its traditional role as the rebalancing mechanism for the oil market. Read the rest of this entry »

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

5th December 2014

Saudi oil-price cut prompts Canadian energy stock slide – by Shawn McCarthy (Globe and Mail – December 5, 2014)

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 — Saudi Arabia slashed the price it will charge for crude in Asia and the United States as the OPEC giant battles to maintain its share in an over-supplied global market.

The move prompted another sell-off among skittish traders, who are wondering where the floor in prices is. The 12-member Organization of Petroleum Exporting Countries last week refused to cut its production quota in the face of a global glut, sending oil prices into a tailspin.

It remains unclear still how low prices will go – and how long it will be before they recover. In New York on Thursday, the benchmark West Texas Intermediate fell 70 cents to $66.68 (U.S.) per barrel, after falling as low as $66.09. In London, Brent crude was down 80 cents to $69.12.

The Saudi move signals a drawn-out standoff among producers that is likely to weigh on oil prices for months and hit Alberta’s oil industry. Canadian energy shares sank another 5 per cent Thursday, extending their slide in recent weeks as investors brace for sharply lower profits from the sector. The dip in energy stocks helped send the S&P/TSX composite index tumbling 2 per cent to close at 14,469.95. Read the rest of this entry »

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

5th December 2014

Enough with pipelines. Refine it – by Gordon Gibson (Globe and Mail – December 5, 2014)

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.

Oil prices are down, but they will be back up, as always. Meanwhile, new supply comes on stream from existing construction. So the great Canadian issue remains new oil pipelines from Alberta. For supporters, these long-term projects will generate untold billions of dollars every year, including tax revenue to pay for all the health and education and other good things. For opponents, the pipelines will facilitate the very destruction of the planet through carbon release, or at a minimum foul our streams and oceans.

This is surely of national consequence. So it is passing strange that the debate is being led by premiers and even mayors. After all, the Constitution gives Ottawa exclusive jurisdiction in this area, including the Northern Gateway, Kinder Morgan and Energy East pipelines. And the government with the power stands mute.

Yes, the National Energy Board is holding hearings, but that process is getting minimal respect from opponents on three grounds. First, that it is an alleged rubber stamp. I don’t believe that, though. The technical and route environment and aboriginal investigations are thorough.

The second, correct observation is that the process is not considering the supposedly most important matter of all, namely the carbon consequences of extracting oil from what opponents call the “tar sands.” Read the rest of this entry »

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

Advertising Info
Rated Top Mining Blog of 2011
The Northern Miner
Mining IQ
Canadian Mining Journal
Northern Life
IBA Research network
NetNewsLedger
Earth Explorer