By Nick Cunningham: The US shale oil and gas industry is in trouble. Drillers have to borrow more and more just to stay on the fracking treadmill, even as production and revenues disappoint. And some of them could be heading toward bankruptcy.
ExxonMobil, BP, Total, and other oil majors are doubling down in Russia despite moves by the West to isolate Russia; they just signed mega-contracts with state-owned Russian oil companies – sanctions be damned.
Grins were on the faces of CNPC executives as they celebrated a blockbuster 30-year deal for Russian gas. For some, however, those grins might turn to grimaces; CNPC has been caught up in a series of highest profile corruption investigations.
As Russian President Vladimir Putin tries to tighten his grip over Eastern Europe with Gazprom’s vast web of natural gas pipelines, one tiny European country gained a bit of leverage over Russia: Lithuania.
Vietnam and China are in a red-hot standoff in the South China Sea over China’s oil rig in Vietnam’s 200-mile exclusive economic zone. But inaction in Congress has boxed the US into a corner.
Petrobras is the world’s most indebted and least profitable oil major. It has $114.3 billion in debt. Production stagnates. Its shares have lost half their value since 2010. It’s embroiled in scandals. And President Dilma Rousseff is on the hook.
Russia’s primary energy customer is Europe, which is now planning sanctions. That has accelerated the natural gas deal Russia is trying to hammer out with China. But they’ve been negotiating for years, the biggest sticking point being price!
It “tried to keep its rewards and shed its responsibilities by playing a corporate shell game, putting its oil-and-gas business in a new entity and leaving behind a bankrupt shell” with environmental liabilities of defunct, polluting businesses.
That the US could unleash a flood of oil from the Strategic Petroleum Reserve to drive down prices has been pushed for weeks, most recently by George Soros, but has been dismissed as not a serious option. Then Obama went to Saudi Arabia.
Shell is already steeped in its Alaska offshore debacle. Now its new boss admitted that fracking in the US, after a huge investment, is a money-losing business.