The oil industry is not the sexiest place to be right now. The combined effect of the BP oil spill, competition from the highly-paid financial services sector and the emphasis from governments around the world on creating green jobs has left some in the industry worrying about how they can continue to attract top talent.
Oil companies are now rumoured to be offering staff huge incentives to come and work for them, especially if they are working in the field: DVDs, games, food, drinks, you name it they get it. Understandably so if the alternative for a talented science grad is to work in the air-conditioned offices of a bank or with a small start-up working at the cutting edge of green technology.
Is Rosneft about to buy its first foreign refining assets? That is the speculation doing the rounds today as Venezuelan president Hugo Chavez arrived in Moscow on a state visit. Talks with Russia’s leaders will focus on plans for cooperation between the two countries, including in the energy sector.
Rosneft has been in talks to buy a 50 per cent stake in Germany’s Ruhr Oel from the Venezuelan state company Petroleos de Venezuela. Ruhr Oel is a 50:50 joint venture between PDVSA and BP. BP has a right of refusal on PDVSA’S stake.
The deal could be worth between $1bn and $2bn. What better time to announce a deal than during a state visit? One interesting element of the potential transaction is that it could lead to BP eventually being given the right to explore for oil in the Russian waters of the Arctic Ocean.
It looks like Opec will keep production levels unchanged, as predicted by the FT a month ago.
Wilson Pastor-Morris, the Ecuadorian natural resources minister and current president of the oil cartel, has said the present quotas had “served [their] purpose well” and “reduced volatility at a critical time for the world economy”. A pretty big hint that levels will not change, despite the desire of some Opec members to see oil at up to $100 a barrel.
David Blair has the full story from Vienna.
Oil company stocks may have risen on the news that the Obama Administration was lifting the moratorium on deepwater drilling in the Gulf of Mexico, but analysts are not rushing to change their outlooks for these companies. The bottom line is that the decision does not mean it is business as usual for anyone operating in the Gulf of Mexico.
The administration has imposed new regulations, including those requiring outside auditors to certify blowout preventers are in working order. The companies must file a more comprehensive cleanup plan than in the past, with enforceable obligations that ensure that containment resources are available. And chief executives must certify that they have complied with all the new regulations. Beyond that, the authorities plan to inspect rigs to ensure compliance before permitting them to get back to work.
The reality is that this will take time. The regulators were underfunded and undermanned before the disaster, and it is unlikely the extra funding granted last month to heighten oversight of offshore drilling – $25m – is going to drastically change things.