Oil crashes below $50 – Big Oil loses $200 billion
The meltdown in oil prices has wiped out more than $200 billion in market valuation among the 10 largest oil and natural gas companies in the S&P 500. To combat depressed prices, oil companies are hitting the brakes on spending and laying off workers. Investors are saying “enough.” They are dumping their energy stocks as the outlook for profits and dividends has diminished significantly.
From a BBC News article published 7 Jan 2015 under the headline:
“Brent crude oil price dips below $50 a barrel”
The price of Brent crude oil has fallen below $50 a barrel for the first time since May 2009.
It fell more than a dollar to $49.92 a barrel in early trading on Wednesday before edging back above the $50 mark.
Slowing global growth and increased supply of oil and gas have pushed prices sharply lower in recent weeks.
The price of oil traded in the United States, known as West Texas Intermediate crude, has already fallen below $50.
Many observers expect the price of oil to fall further as North American shale producers continue to supply increasing quantities of oil and gas, and the oil-producing group Opec resists calls for cuts in production to support prices.
“With no sign that Opec will do anything about over-production, it seems likely that we could well see further declines towards $40 in the coming weeks,” said CMC Markets analyst Michael Hewson.
From an article by Matt Egan published on 7 Jan 2015 by CNNMoney under the headline:
“Big Oil loses $200 billion from oil price crash”
ExxonMobil (XOM), the largest public energy company in the world, has seen its market cap plunge by more than $50 billion. Energy titans like Chevron (CVX) and ConocoPhillips (COP) have experienced even sharper declines on a percentage basis.
These companies are being slammed by crude oil falling below $50 a barrel. Drilling projects that made lots of financial sense at $100 a barrel no longer look smart.
America’s 10 largest oil and natural gas companies have lost more than $200 billion combined since oil peaked in June, according to a CNNMoney analysis of FactSet data.
To combat depressed prices, oil companies are hitting the brakes on spending and laying off workers. Investors are saying “enough.” They are dumping their energy stocks as the outlook for profits and dividends has diminished significantly.
Shell Halts $90-Million Payout for Toxic Neighborhood after Judge Says Deal Can’t Be Secret
Article by Ken Broder from theAllGov.com website in California, published Wed 7 Jan 2015
A lawyer suing on behalf of residents in the contaminated neighborhood of Carson said his clients would never settle with the much reviled Shell Oil over the toxic brew it buried a few feet beneath their soon-to-be-built houses.
Then they did, for $90 million in late November.
In reviewing the settlement before deciding whether to accept it, Los Angeles Superior Court Judge William Highberger indicated he might not keep terms of the agreement secret, as agreed to by the parties.
That didn’t sit well with Shell Oil and last month the company told the judge the settlement is unsettled while they consider their options. A third party to the legal battles swirling around the environmental disaster, the developers who built on the toxic mess, said they had not seen the settlement and feared important information about the site would be kept secret.
They care about that because Shell sued them for $40 million. “We know there’s something in the agreement they really don’t want the plaintiffs, or us, or the public to see,” developers’ attorney William Thomson told Law360. “This is not a small matter.”
Very little of what happened to the L.A-area Carousel neighborhood is a small matter. When Shell closed its 50-acre facility there, it smashed to pieces three crude oil reservoir tanks, with a total capacity of 3.5 million barrels, and buried them under a few feet of dirt. The reservoirs were concrete-lined earth slopes with asbestos-composition-covered frame roofs.
The land was quickly sold and homes were built. The underground toxic stew wasn’t discovered until 2008, when testing of a nearby manufacturing plant led back to where 285 residents were soaking up benzene, methane and other toxic chemicals that were oozing through the still-oil-soaked dirt.
Two years later, with no cleanup in sight, residents sued and were joined by the city of Carson in 2013. Shell proposed a cleanup plan in late April 2014 that was rejected by the state as too skimpy, and a week later sued the developers. The company agreed to a $146-million cleanup plan in October, which would permit residents to temporarily relocate while 161,700 cubic feet of oily dirt was trucked out.
Although lawsuit settlement details are unknown, the Torrance Daily Breeze reported that a confidential letter they saw indicated lawyers and residents would split the money, with determinations to be made later about each resident’s share. Shell offered to compensate residents forced to sell their homes below market value.
–Ken Broder
Shell settles Nigerian oil spills claim for $83.5 million
An AFP article published 7 Jan 2015 by Mail Online under the headline:
“Shell strikes Nigerian oil spills compensation deal”
Royal Dutch Shell has agreed a multi-million-dollar settlement to compensate 15,600 Nigerian fishermen over two serious oil spills in 2008 after a three-year legal battle, both parties announced Wednesday.
The Anglo-Dutch energy giant’s Nigerian arm has agreed to pay £55 million ($83.5 million, 70 million euros) to people in Bodo, a town in southern Nigeria, Shell and the fishermens’ London-based lawyers Leigh Day said.
The Shell Petroleum Company of Nigeria (SPDC) will pay around £35 million to the individual claimants, and a further £20 million to the community.
The out-of-court settlement averted a full trial at the High Court in London and the money has been paid to the claimants’ lawyers.
Each individual will receive around £2,200, equivalent to around three years’ income on the Nigerian minimum wage, Leigh Day said.
SPDC accepted in November that the spills, caused by operational failures on the Bomu-Bonny pipeline in Bodo, were greater than the previously-reached total figure of 4,144 barrels, though they did not give an amount.
Amnesty International claimed the first leak could have exceeded 100,000 barrels, while Leigh Day claimed both spills could have entailed 600,000 barrels.
SPDC said the leaks were “highly regrettable”, but insisted most oil pollution in the Niger River Delta region was caused by theft and illegal refining.
Separately, SPDC is set to clean up the affected area.
Chief Sylvester Kogbara, chairman of the Bodo council of chiefs and elders, said his community was happy the case had finally been laid to rest.
“The hope is that this will forge a good relationship with Shell for the future, not only with the Bodo people but with all the Niger Delta communities that have been impacted in the same way as us,” he said.
“Due to the cordiality of the conclusion of this agreement with Shell, we are hopeful that the clean-up of the Bodo environment will follow suit in no distant time.”
– Shell ‘committed’ to clean-up –
The clean-up of Bodo Creek is expected to begin over the next two to three months.
Nigeria is Africa’s biggest crude producer, but much of the Niger Delta oil region remains deeply impoverished.
Decades of spills have caused widespread pollution in the region.
“From the outset, we’ve accepted responsibility for the two deeply regrettable operational spills in Bodo,” said SPDC managing director Mutiu Sunmonu.
“We’ve always wanted to compensate the community fairly and we are pleased to have reached agreement.
“We are fully committed to the clean-up process being overseen by the former Netherlands ambassador to Nigeria.
“We are pleased that clean-up work will soon begin now that a plan has been agreed with the community.”
Sunmonu added: “However, unless real action is taken to end the scourge of oil theft and illegal refining — which remains the main cause of environmental pollution and is the real tragedy of the Niger Delta — areas that are cleaned up will simply become re-impacted through these illegal activities.”
Amnesty called the settlement an “important victory for the victims of corporate negligence”.
The London-based human rights group claimed many Bodo residents had their fishing and farming livelihoods destroyed by the spills and, without compensation, have faced poverty in the years since, it said.
RELATED
Shell agrees $84m deal over Niger Delta oil spill: BBC News 7 Jan 2015
Extract
Lawyer Martyn Day, who represents the claimants, said it was “deeply disappointing that Shell took six years to take this case seriously and to recognise the true extent of the damage these spills caused to the environment and to those who rely on it for their livelihood”.
Shell to Pay $83 Million Settlement for Nigeria Oil Spills: BloombergBusinessweek 7 Jan 2015
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Shell, the biggest oil producer in Nigeria, has faced criticism from locals who say it pollutes the environment. In 2009, the company agreed to pay $15.5 million to settle U.S. lawsuits brought by Nigerians representing the delta’s Ogoniland area.
Shell Settles Nigeria Oil Spill Claims for $83 Million: Voice of America/Reuters: 7 Jan 2015
“It’s very unusual to have thousands benefit,” Day said. “The money will go directly to their bank accounts, and this will hopefully be a model for future claims.”
Nigeria: Long-awaited victory as Shell finally pays out £55 million over Niger Delta oil spills:Amnesty International 7 Jan 2015
Court documents expose Shell’s false claims on Nigeria oil spills: Amnesty International 13 November 2014
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Court documents revealed by Amnesty International today expose the fact that Shell has repeatedly made false claims about the size and impact of two major oil spills at Bodo in Nigeria in an attempt to minimize its compensation payments. The documents also show that Shell has known for years that its pipelines in the Niger Delta were old and faulty.
Activists in Port Harcourt, Nigeria protest to demand that Shell pay reparations and clean up its oil spills. © Amnesty International
The TRUTH will set you FREE.
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From an article by Joe Carroll and Tara Patel published 6 Jan 2015 by BloombergBusinessweek under the headline:
Article by Jeremy Cresswell published by EnergyVoice.com on 6 Jan 2015 under the headline:
Reuters: Tuesday, Jan 06, 2015
