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Ecuador vs. Chevron, By Way of Canada
Ecuador vs. Chevron, By Way of Canada
In the latest twist to a 22-year-old legal saga, Canada’s Supreme Court ruled on September 4th that Ecuadorian villagers can seek to enforce an Ecuadorian legal judgment in Canada for $9.5 billion against Chevron Corporation for polluting the Amazon rainforest.
The plaintiffs were successful in arguing that since Chevron owns at least $15 billion worth of assets in Canada – including Newfoundland offshore oil fields, major investment in the Alberta tar sands, an oil refinery in B.C., natural gas holdings, and other assets – they can pursue the case in Ontario courts. In the unanimous 7-0 ruling, the Canadian Supreme Court sided with the villagers’ lawyers, agreeing that the province of Ontario has jurisdiction to recognize the $9.5 billion judgment obtained in 2011 by the villagers in an Ecuadorean court. [1]
Chevron Corp. had appealed to the Supreme Court in the hopes of overturning a lower-court decision that said the villagers could pursue their case in Ontario courts.
In the Supreme Court case, California-based multinational Chevron Corp. argued that its Canadian assets don’t belong to the parent company, but to a subsidiary called Chevron Canada Ltd. But the high court rejected the company’s arguments. Justice Clement Gascon ruled that Chevron Canada’s “bricks-and-mortar business in Ontario and its significant relationship with Chevron” is enough to establish jurisdiction for the case. [2]
The ruling does not mean that the Ecuadorian villagers can now seize Chevron’s Canadian assets. It only means that the case can go forward at a subsequent trial court in Ontario. As Justice Gascon wrote, “A finding of jurisdiction does nothing more than afford the plaintiffs the opportunity to seek recognition and enforcement.”
Nonetheless, the villagers and their lawyers believe the decision by the Supreme Court of Canada “has set an important milestone” [3] in a case that has been called “the trial of the century.”
…click on the above link to read the rest of the article…
Canada Clears Way for Ecuadorean Case Against Chevron Over ‘Amazon Chernobyl’
Canada Clears Way for Ecuadorean Case Against Chevron Over ‘Amazon Chernobyl’
A protestor shows his black painted hand as he carries an Ecuador flag to protest against Chevron and the oil contamination in Ecuador’s Amazon region during a joined global demonstration in Madrid, Spain, in 2013.. (Andres Kudacki / AP)
Canada’s Supreme Court ruled Friday that Ecuadorean villagers can go after Canadian assets of the US-based oil major Chevron. The lawsuit has been one of the most bitterly contested environmental cases in history, involving a contamination that environmentalists have dubbed the “Amazon Chernobyl.”
From Al Jazeera:
The plaintiffs, who include about 30,000 villagers and indigenous people, decided to go after the energy giant’s assets in Canada, Brazil and Argentina after the company contested a ruling by Ecuador’s highest court to pay $9.5 billion to clean up the contamination site.
Communities in the Lago Agrio region of Ecuador allege that Texaco, which was acquired by Chevron in 2001, dumped some 16 billion tons of oil and toxic waste in the Amazon rainforest as a cost-saving measure between 1964 and 1992, Telesur reported. That’s 80 times the amount of oil spilled in the 2010 British Petroleum Gulf of Mexico oil disaster, the Latin American news website added.
Ecuadorian villagers and indigenous communities affected by the contamination allege that it has resulted in illness and death, Telesur reported in June, and that they are still suffering the consequences of Texaco’s actions.
Plaintiffs claim that Texaco attempted to hide the dumping by covering nearly 1,000 oil pits with vegetation. People eventually built homes over some of the pits, and began coming down with mysterious illnesses, it is claimed.
“It has been 33 years … and I never knew that this was a covered pit,” local resident Serbio Curipoma told Telesur.
…click on the above link to read the rest of the article…
The Layoffs Return: Energy Giants Chevron, Saipem To Fire Over 10,000 Workers
The Layoffs Return: Energy Giants Chevron, Saipem To Fire Over 10,000 Workers
In the beginning of 2015 the biggest threat to the economy as a result of the collapse in oil prices, both in the US and worldwide, was the surge in layoffs among highly-paid energy sector job. This was confirmed in April when we showed the Challenger layoffs data for the energy-heavy state of Texas, and the energy sector in general where the 37,811 job cuts in Q1 were some 3,900% higher than a year earlier.
Then in Q2, after the price of oil staged a substantial rebound of about 50% from the year to date lows in the $40’s, energy-related layoffs trickled to a halt as corporations hoped the worst is behind them, and as a result would merely bide their time before redeploying their workforce toward exploration and production.
Alas, this was not meant to be, and as the events of the last month have shown, oil has resumed its downward slide. And, as expected, so have layoffs.
Overnight, US energy major Chevron announced it will cut 1,500 jobs globally “as the company aims to reduce internal costs in multiple operating units and the corporate center.” According to Rigzone, “the San Ramon, Calif.-based energy company will cut 950 positions in Houston, 500 positions in San Ramon and 50 positions internationally.”
Chevron is cutting jobs due to the current market environment and is “focused on increasing efficiency, reducing costs and focusing on work that directly supports business priorities,” Chevron spokesperson Melissa Ritchie said in an email to Rigzone.
Chevron will be cutting 1,500 employee positions across the 24 groups that comprise the corporate center; 270 of the positions are existing vacancies that will not be filled. Additionally, 600 staff augmentation contractor positions will be cut in the corporate center.
…click on the above link to read the rest of the article…
Is Mexico Ready For Life Without Its Sugar Daddy?
Is Mexico Ready For Life Without Its Sugar Daddy?
The autopsy has already begun.
As the world’s attention is transfixed by every new development in Chapo Guzman’s latest audacious prison break, something much more important – and potentially more dangerous – is happening in Mexico. Yesterday the country held its first auction of offshore oil leases, bringing to an end 77 long years of state control over energy.
Until yesterday, Petróleos Mexicanos, A.K.A. Pemex, the state oil company, ran all oil and gas production in Mexico. But that has now changed. With it a new age has begun, one in which Mexico’s energy sector will finally get the funds it needs to extract the vast hydrocarbon resources it has at its disposal. It will also get the technology it needs for deepwater drilling in the Gulf of Mexico as private companies, in particular from the US and the UK, provide essential know-how and best practices. In short, it is a perfect win-win for all concerned…
Or at least it was supposed to be, until the bottom fell out of the global oil markets. Now the stagnant market is overwhelmingly in the buyer’s favor and yesterday, as Bloomberg reports, the buyers weren’t interested in buying:
Mexico’s first auction of offshore oil leases fell short of the country’s expectations as several majors decided not to participate.
Only two of the 14 shallow-water blocks released on Wednesday received qualifying bids. Exxon Mobil Corp., Chevron Corp. and Total SA passed on the country’s sale of territory in the Gulf of Mexico, 77 years after the country nationalized crude. The 14 percent success rate was less than half the 30 percent to 50 percent goal that the government said would be its minimum for judging the event a success.
…click on the above link to read the rest of the article…
Another 4.4 Magnitude Industry Reported Quake in Alberta
Another 4.4 Magnitude Industry Reported Quake in Alberta
Chevron shuts down operations following seismic event near Fox Creek.
Chevron Canada has confirmed that “a magnitude 4.4 seismic event was recorded by seismic monitoring arrays operated by Chevron Canada and Natural Resources Canada” in the Duvernay shale near Fox Creek, Alberta on Saturday.
It’s the second record-breaking industry-reported tremor to hit the region in a year. In January, industry triggered a 4.4 magnitude earthquake in the Duvernay shale.
That event forced the Alberta Energy Regulator to adopt a “traffic light system” to regulate seismic events in the region. The system requires companies to report events greater than a magnitude of 2.0, and to shut down operations once a 4.0 magnitude event is observed nearby.
As a result of the new regulations, Chevron reported the earthquake to the regulator and shut down operations at a natural gas well pad located approximately 27 kilometres south of Fox Creek.
However, the regulator has given the company permission to finish securing the well before it temporarily suspends operations at the site.
A spokesman for Chevron Canada, Lief Sollid, said the company “was installing production tubing in a well on the pad at the time of the event. Multi-stage hydraulic fracturing operations were completed on the eight-well pad on June 5.”
Hydraulic fracturing, the cracking of rock with highly pressurized fluids, can trigger an earthquake days after the event.
Sollid added in an email that “no injuries, property damage or environmental impacts have been reported as a result of the event.”
Since 2013, when companies started to fracture the deep shale with one to two-kilometre-long horizontal wells, the region has experienced a wave of tremors.
The Duvernay shale, or what stock promoters have dubbed the “new millennium gold,” covers a 56,000 square mile region and contains natural gas liquids. An average horizontal well may cost $15 million to drill.
Chevron is part-owner of the Kitimat LNG project, which will operate as an export facility for unconventional natural gas that has been fracked and extracted from British Columbia’s Liard and Horn River basins.
…click on the above link to read the rest of the article…
Get Ready for Oil Deals: Shale Is Going on Sale
Get Ready for Oil Deals: Shale Is Going on Sale
(Bloomberg) — A decision by Whiting Petroleum Corp., the largest producer in North Dakota’s Bakken shale basin, to put itself up for sale looks to be the first tremor in a potential wave of consolidation as $50-a-barrel prices undercut companies with heavy debt and high costs.
For the first time since wildcatters such as Harold Hamm of Continental Resources Inc. began extracting significant amounts of oil from shale formations, acquisition prospects from Texas to the Great Plains are looking less expensive.
Buyers are ultimately after reserves, the amount of oil a company has in the ground based on its drilling acreage. The value of about 75 shale-focused U.S. producers based on their reserves fell by a median of 25 percent by the end of 2014 compared to 2013, according to data compiled by Bloomberg. That’s opening up new opportunities for bigger companies with a better handle on their debt, said William Arnold, a former executive at Royal Dutch Shell Plc.
“In this market, there are whales and there are fishes, and the whales are well armed,” said Arnold, who also worked as an energy-industry banker and now teaches at Rice University in Houston. “There are some very vulnerable little fishes out there trying to survive any way they can.”
Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil Corp. or Chevron Corp., companies that have bided their time for years as the value of some shale fields soared to $38,000 an acre from $450 just a few years earlier.
…click on the above link to read the rest of the article…
Oil Majors’ Profits Take A Beating
Oil Majors’ Profits Take A Beating
The first quarterly earnings reports since the collapse of oil prices are in and the numbers show a significant deterioration in profits for the oil majors.
Royal Dutch Shell went first on January 29, revealing a big jump from the same quarter a year ago, but down from the third quarter of 2014. In fact, Shell announced that it would cut $15 billion in spending over the next few years, an about-face from just a few months ago when it stated that it would leave capital expenditures unchanged in 2015. Shell’s CEO, concerned about the poor state of oil and gas markets, said that it may even consider withdrawing itself from significant assets held around the world, retrenching and focusing on North America.
On the same day, ConocoPhillips also reported gloomy numbers. It plans onslashing 2015 spending by an additional 15 percent, which comes after a December announcement of a 20 percent cut in expenditures for the year.
Related: Schlumberger To Retake Oil Services Crown With New Deal
Chevron followed that up on January 30, posting its worst showing in five years. The $3.5 billion in earnings for the fourth quarter of 2014 was 30 percent lower than from the previous year. The California-based oil major says that it will trim spending by 13 percent.
…click on the above link to read the rest of the article…
It Begins: Energy Giant Chevron Suspends Stock Buyback, Blames “Cash Flow Squeeze”
It Begins: Energy Giant Chevron Suspends Stock Buyback, Blames “Cash Flow Squeeze”
It was less than 24 hours after we posted that either oil will double from here allowing energy companies to grow into a normal P/E multiple, or energy stocks will have to crash by over 40% for the ridiculous 23x to return to its normal, long-term average of 13.6x. Moments ago energy giant Chevron admitted that not only does it not see oil doubling any time soon, but that energy prices are almost certain to go far lower from here, and as a result the company decided that after buying back $5 billion of its shares in 2014, i.e., buying high and higher before the stock crashes may not be the best use of dwindling cash flow, and as a result has just suspended its stock buyback program of the rest of 2015. Yes, energy giant Chevron just ended its buyback!
As regular readers know, company buybacks are forecast to be the single biggest source of demandfor stocks in 2015..
… which means this may well be the beginning of the end of the 6 year bull market. For now, the realization if only hitting Cheveron stockholders.
…click on the above link to read the rest of the article…
Chevron Slashes 23% Of PA Workforce As US Rig Count Collapses To June 2010 Lows
Chevron Slashes 23% Of PA Workforce As US Rig Count Collapses To June 2010 Lows
For the 8th week in a row (something that hasn’t happened since June 2009), US total rig count plunged. This week’s 90 rig drop to 1543 is the largest so far (with oil rigs down 94 to 1223 – lowest since Jan 2013). The total rig count is now down 20% in the last 8 weeks to the lowest since June 2010 as it tracks the 4-month lagged oil price perfectly. This is the 2nd biggest 8-week drop in 22 years. This – rather unsurprisingly – has led Chevron to decide to cut 23% of its Pennsylvania workforce “due to activity levels.” Not ‘unambiguously positive’ as so many in the central planning bureaus would have everyone believe.
The Rig Count continues to plunge along with lagged oil prices…
Obviously for oil prices to eventutally stabilize, production will have to slow and rig counts plunge further.. and so will jobs…
- *CHEVRON TO CUT 23% OF PENNSYLVANIA WORKFORCE AMID CRUDE SLUMP
- *CHEVRON JOB CUTS STEM FROM LOWER-THAN-EXPECTED ACTIVITY LEVELS
Charts: Bloomberg
Oil jumps 3 percent to $63 as energy firms slash investments | Business | Reuters
Oil jumps 3 percent to $63 as energy firms slash investments | Business | Reuters.
LONDON (Reuters) – Brent crude jumped 3 percent to above $63 a barrel on Thursday, extending a rebound from five-year lows this week as oil’s six-month price rout forced more energy firms to cut investments in new production.
Oil this week slumped as low as $58.50 and has almost halved since June as fast-growing U.S. shale output overwhelms demand, with losses accelerating after producer group OPEC decided not to cut output at its meeting last month.
But signs that lower prices are threatening future production have given some traders pause. Oil prices were volatile on Wednesday, briefly spiking as much as 6 percent as players rushed to close short positions, before falling back.
At 1109 GMT on Thursday, Brent for February delivery was $2.09 higher at $63.27, after settling up $1.17 in the prior session.
U.S. crude for January delivery, which expires after Friday’s settlement,
Chevron Pulls Out Of $10 Billion Gas Deal With Ukraine
Chevron Pulls Out Of $10 Billion Gas Deal With Ukraine.
Ukraine’s bid to rid itself of its dependence on Russian energy just took a huge hit.
Chevron announced that it was pulling out of a deal that it made with the Ukrainian government to develop shale gas in western Ukraine. The $10 billion deal was signed before the ouster of former Ukrainian President Viktor Yanukovych.
Chevron indicated that it was unsatisfied with the tax regime in Ukraine, after the post-Yanukovych government raised energy taxes. “We have just terminated that PSA (product sharing agreement),” said Peter Clark, Chevron’s country manager in Ukraine, according to Kyiv Post. “When it was signed, things had to be done, but not all of them got done.”
The deal with Chevron was signed in November 2013, and called for Chevron to invest $350 million over the first two to three years to develop Ukraine’s Olesska field in the western part of the country. The agreement kept open the possibility of ramping up investments to $10 billion over the course of Chevron’s 50-year lease. The Olesska field was expected to produce 10 billion cubic meters of gas each year when it was up and running.
Related: Ukraine Sends Russia Huge Advance Payment For Gas
But Chevron insisted that it would only move forward if the Ukrainian government simplified a series of tax laws. With no action from Kyiv, Chevron has decided it cannot move forward, and informed the Ukrainian government on December 15 of its intention to pull out of the deal.
Early Signs Of A Pullback In Drilling Activity
Early Signs Of A Pullback In Drilling Activity.
With oil prices low and showing no sign of an immediate rebound, the industry is beginning to pull back on spending.
Oil prices have dropped around 30 percent since summer highs, raising fears among producers across the globe. Yet, many oil majors are relatively diversified, with large holdings downstream. For example, ExxonMobil and Chevron have been insulated in the third quarter because of their large holdings in refining. Steep declines in oil prices may hurt their production sectors, but with lower priced oil as an input, big oil’s refining assets become more profitable.
For the third quarter, ExxonMobil reported a 3 percent rise in earnings compared to quarter three in 2013. That was largely driven by the Texas-based oil giant’s refining assets, which saw its profits rise by more than 70 percent from $592 million to $1.02 billion. Chevron’s refining program succeeded in quadrupling its profits in the third quarter, more than offsetting the hit the company has taken from the slide in oil prices.
…click on the above link to read the rest of the article…
Oil Companies Spending Big To Defeat Community-Led Anti-Fracking Initiatives At The Ballot Box | DeSmogBlog
Election day is fast approaching and, in a pattern becoming all too familiar, oil companies are spending big to defeat citizen-led initiatives to halt fracking in California.
By last August, oil industry front groupCalifornians for Energy Independence, which is leading the charge against anti-fracking measures in the sate, had raised around $3 million. Now, just one week before the election, that number has more than doubled to just under $7.7 million, per the California Secretary of State’s campaign finance database.
Chevron is the leading donor to Californians for Energy Independence, having made two donations totaling about $2.6 million. Occidental Petroleum and Aera Energy have kicked in some $2 million apiece, and Exxon has given $300,000. Every single dollar received by CEI has come from an oil company.
Once the polls close, we’ll know how well that money was spent. One thing is clear, however: Big Oil has not succeeded in buying the hearts and minds of many Californians, who overwhelmingly reject the plans to frack the Golden State, polls have shown.
…click on the above link to read the rest of the article…
