Daily Archives: April 8, 2011

Kiran Stacey

Moody’s has been explaining why it downgraded Tepco’s credit rating in the wake of the Fukushima crisis. It’s hardly a decision that needs much justification: the problems have been as visible and arguably as damaging to the company’s reputation as the Gulf of Mexico spill was to BP.

But Moody’s report makes some interesting points: the first being that its analysts think there is a high likelihood of the Japanese government stepping in to prop up the company. This actually gives the company a higher long-term rating than its stand-alone credit profile (SACP), which is now a junk-rated BB+.

Bob Dudley, BP chief executive, and Vladmir Putin, Russian prime minister, when the BP-Rosneft deal was announced in January 2011BP is running out of options. Its plans for a cooperation pact with Russia’s Rosneft was on Friday blocked for a second time by a legal challenge from its Russian partners in its existing Russian joint venture, TNK-BP.

While the international tribunal has still to give a definitive ruling on a key element of the accord – a $16bn share swap – its temporary injunctions could now have a permanent effect on BP’s ability to close the deal. The Russian TNK-BP partners headed by oligarch Mikhail Fridman are winning in their effort to block the ambitious venture.

As beyondbrics has reported, the Stockholm tribunal – which is actually three Brits meeting in London – ruled on Friday that a temporary injunction blocking the share swap should remain in place.

Kiran Stacey

In this week’s readers’ Q&A session, Amrita Sen, oil analyst at Barclays Capital, answers your questions.

In this second of two posts, she discusses drilling in the US, national oil subsidies and growing demand from the Middle East.

Earlier, she answered questions on whether speculation is driving up the oil price, whether such an increase could trigger another recession and when “peak oil” might occur.

(NB – Because of a very high volume of questions, we were not able to tackle every question submitted. Apologies if yours was not answered.)

Next week, Michael Bromwich, director of the US oceans regulator, will be answering your offshore-drilling queries. Email questions to energy.source@ft.com by the end of Sunday, April 10th.

But for now, over to Amrita:

BP failed on Friday to secure legal permission to go ahead with its proposed share deal with Rosneft, the Russian state-controlled oil group, after the Russian partners in its existing Russian venture TNK-BP opposed the plan.

The arbitration court, which had earlier blocked a proposed BP-Rosneft venture for Arctic exploration, on Friday ruled that the second element in the overall agreement – the share swap – could not go ahead on its own for now, under the terms of a temporary unjuction.

Kiran Stacey

In this week’s readers’ Q&A session, Amrita Sen, oil analyst at Barclays Capital, answers your questions.

In the first of two posts, she discusses whether speculation is driving up the oil price, whether such an increase could trigger another recession and when “peak oil” might occur.

Later, she will discuss drilling in the US, national oil subsidies and growing demand from the Middle East.

(NB – Because of a very high volume of questions, we were not able to tackle every question submitted. Apologies if yours was not answered.)

Next week, Michael Bromwich, director of the US oceans regulator, will be answering your offshore-drilling queries. Email questions to energy.source@ft.com by the end of Sunday, April 10th.

But for now, over to Amrita:

Kiran Stacey

The global economic recovery is unlikely to be threatened by rising oil prices, Amrita Sen, oil analyst at Barclays Capital, has said.

Answering Energy Source readers’ questions, Sen said she expected a “longer term increase in prices” with Opec spare capacity stretched and energy demand continuing to rise. But unlike other forecasters, she said such a rise would not threaten demand, with eastern consumers willing to pay more for their energy and western ones dipping into their savings.

FT Energy Source

- World still to weather higher oil prices – FT

- Crude at $175? Oil traders test the future – FT

- Chevron rekindles old Texas flame – WSJ

- Libya rebels fight to keep oil lifeline open – FT

- Libya’s Ghanem says strikes shut down Sarir oilfield – Bloomberg

- UK regulators warn Transocean on North Sea operations – WSJ

- Quake jolts Japan’s northeastern coast – FT

- Cairn deal hits snag in Indian cabinet – The Times

- Stakes rise over BP’s Rosneft venture – FT

- Fu Chengyu to join Sinopec as chairman from Cnooc – Bloomberg

- Exxon CEO defends XTO purchase – WSJ

- National Grid ‘errors’ caused US scandal – The Telegraph

- Moscow lures Ukraine with cheap gas – FT

- Green energy plans mired in uncertainty, says Miliband – The Times

- GE in fresh renewable energy push – FT

- US falls behind China in wind power – Reuters

- Fuel prices stir concern about biofuels – NY Times

- EU plans to link emissions trading with California – The Guardian

- House votes to prohibit emissions regulation – Argus

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