Norway's Equinor ASA
Norway's Equinor ASA, Brazil's Dommo Energia SA and Anglo-French firm Perenco are among at least six oil producers that have registered coronavirus cases among employees or contractors at facilities off the coast of Brazil, according to industry and regulatory sources. Royal Dutch Shell PLC and Brazil's Enauta Participacoes SA have registered one case each. Hundreds of cases have been recorded at oilfields operated by state-run Petrobras.
Norwegian oil major Equinor recently approved a wind project that may well transform the offshore oil industry forever
Europe's top oil and gas companies have diverted a larger share of their cash to green energy projects since the coronavirus outbreak in a bet the global health crisis will leave a long-term dent in fossil fuel demand, according to a Reuters review of company statements and interviews with executives. The plans of companies like BP
Today I am pleased to present Mr. Peter Hutton. With me on the line, we have Lars Christian Bacher, CFO; Fine. As normal, Lars Christian will introduce the results and presentation for 10 to 15 minutes, and then we will run a Q&A session, which instructions you have had in order to call for around 45 minutes.
The Public Investment Fund of Saudi Arabia is betting big on 2 unloved sectors Continue reading...
The Zacks Analyst Blog Highlights: ExxonMobil, Chevron, BP, Equinor and Royal Dutch Shell
The coronavirus pandemic has indelibly impacted the global energy sector. Although the demand for oil has noticeably dropped and prices have plunged, the pace of shift to renewable energy from fossil fuel is still uncertain.
At least three more ships loaded with gasoline are now anchored off Malaysia and Singapore, Asia's top oil trading centre, taking the total volume of petrol sitting in the region to more than 280,000 tonnes (2.4 million barrels), three trade sources said on Wednesday. Swiss trading company Trafigura is storing the motor fuel onboard Panamax Georg Jacob and Energy Centurion while Norwegian refiner Equinor has gasoline onboard Aframax Sloane Square, the sources said. Ship tracking data from Refinitiv Eikon showed the gasoline onboard Trafigura's ships came from India and South Korea, while Equinor is storing gasoline from its refinery in Norway.
Norway's Equinor is cutting its quarterly dividend by two-thirds as part of an effort to preserve cash, making it the first major oil company to slash shareholder payouts following the collapse in crude prices. Equinor's decision breaks a long-standing industry taboo. For years, the world's biggest oil companies have avoided cutting dividends come what may to keep investors sweet and instead raised debt when necessary to maintain spending.
(Bloomberg) -- Norway plans to draw a record 382 billion kroner ($37 billion) from its wealth fund, forcing the world’s biggest sovereign investor to embark on an historic asset sale to generate cash.The unprecedented withdrawal, revealed in Norway’s revised budget for 2020, is more than four times the previous record set in 2016.The development exposes the scale of the economic damage done by the twin crises of Covid-19 and a collapse in global oil markets, with western Europe’s biggest crude exporter now facing its worst economic slump since World War II.For the first time, Norway’s government is set to withdraw considerably more than the $1 trillion fund generates in cash flow from dividends and interest payments. A Finance Ministry spokeswoman said the estimate for the fund’s cash flow this year is 249 billion kroner. That means asset sales could reach 133 billion kroner, or $13 billion. In the published budget, the Finance Ministry lists cash flow of 258 billion kroner, which includes income from Norway’s domestic wealth fund, the spokeswoman said.“It’s obviously an historic event,” SEB Chief Strategist Erica Dalsto said. “But we’re also in a crisis that lacks historical parallels. This illustrates the double-whammy that’s hit the Norwegian economy, with repercussions from both containment measures and the oil-price collapse.”Bond SalesThe fund is likely to focus on its bond portfolio to generate the cash the government needs, both in the form of outright sales and by retaining cash as some bonds mature. (It needs to replenish its holding of stocks after its equity portfolio fell below a required 70% target of the total portfolio.)Norway’s government uses its oil wealth to plug budget deficits every year. Until 2016, the so-called structural oil-corrected deficit was covered by the state’s income from petroleum, namely taxes, stakes in offshore fields and dividends from Equinor ASA.As long as the government was generating a surplus, it could deposit money into the fund. In 2016 and 2017, deposits were replaced by withdrawals, as petroleum revenue dwindled due to a slump in prices. But the fund was still able to cover that easily with its cash flow.In 2020, everything changed. The government now expects to spend a record 420 billion kroner of oil money on crisis packages to prop up its economy, with the collapse in petroleum revenue compounding the shock. The government predicts its net cash flow from petroleum activities will drop by 62% to 98 billion kroner, the lowest since 1999.‘Financial Muscles’Norway has a self-imposed fiscal rule stating it should use no more than 3% of the fund’s value each year to plug budget holes (which represents the long-term real-return expectation for the fund). But it’s allowed to stray from that limit to help the economy during downturns. At 4.2% this year, spending will exceed the cap for the first time since the financial crisis in 2009.Norway must eventually return to the 3% limit, but this year’s breach is entirely justified, said Finance Minister Jan Tore Sanner.“Even if it’s expensive, it’s necessary,” he told a news conference. “We are lucky in Norway. Where other countries need to borrow money -- maybe even before they’ve paid back following the financial crisis -- we have solid financial muscles.”(Updates with Finance Ministry comment on cash flow estimate from fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
This month, we saw the Equinor ASA (OB:EQNR) up an impressive 37%. But that doesn't change the fact that the returns...
Equinor's
Morgan Stanley analyst calls rate of spending on capital expenditures and on dividends unsustainable.
The Zacks Analyst Blog Highlights: ExxonMobil, Chevron, Royal Dutch Shell, Equinor and ConocoPhillips
We have analyzed three major integrated companies - ExxonMobil (XOM), Chevron (CVX) and BP plc (BP) - to get a view on dividend cut.
Equinor has suspended its 2020 oil and gas output guidance amid government-imposed curtailments and a glut of supply, and could take further action to scale back activity this year, the Norwegian energy firm said on Thursday. With operations from the North Sea to Africa, the Americas and Asia, Equinor had expected 7% output growth this year before Norway, Brazil and others joined OPEC and its allies in ordering production cuts as the coronavirus pandemic roiled oil markets. The company would prioritise "value over volume" and after having already reduced activities, particularly in the U.S. onshore sector, it would consider further reductions, Equinor CEO Eldar Saetre told a news conference.
ExxonMobil (XOM) pares 2020 capital spending budget by 30%, while Equinor (EQNR) announced an oil discovery in the U.S. Gulf of Mexico.
North Carolina-based asset management firm Massif Capital, LLC released its first-quarter investor letter this month – a copy of which is available for download here. The fund was co-founded and is currently being co-managed by Will Thomson and Chip Russell. In their recent letter to investors, Massif Capital announced that the core portfolio was up […]
(Bloomberg Opinion) -- There’s a certain devil-may-care glamour about going on a shopping spree when you’re already living beyond your means. It’s probably not the best way to convince your creditors to keep putting up the cash, however. Saudi Arabia might want to reflect on that after its recent splurge on oil companies, cruise ships and soccer. In the past month, the kingdom’s sovereign wealth fund has bought or been linked to plans to buy an 8.2% stake in cruise operator Carnival Corp.; about 80% of Newcastle United Football Club; and holdings in Royal Dutch Shell Plc, Total SA, Eni SpA and Equinor ASA. Alarmingly, the most sensible item on that shopping list may well be the 13th-placed team in the English Premier League. Carnival shares, for instance, are already down by about a third since the kingdom’s Public Investment Fund completed its acquisition of stock in the business last month.A country as over-exposed to crude as Saudi Arabia shouldn’t be using its sovereign wealth fund to buy more oil, either. Equinor’s controlling shareholder, the state of Norway, last year instructed its pension fund to sell off investments in upstream oil and gas, so as to “make the government’s wealth less vulnerable to a permanent drop in oil prices.” Saudi Arabia is doing the opposite.Even the PIF’s more prudent attempts to diversify its exposures into businesses distant from oil demand haven’t panned out so well. A pre-listing investment of $3.5 billion in Uber Technologies Inc. is worth less than $2 billion now. Its 38% stake in South Korea’s Posco Engineering & Construction Co. has lost more than two-thirds of its value since it was bought in 2015. And the kingdom managed to sell out of Tesla Inc. before its extraordinary rally at the start of the year.As rich heirs have known since time immemorial, a string of failed business ventures doesn’t need to cramp your style as long as that endowment cash keeps flowing — but the problem for Saudi Arabia is that, as we’ve argued, those days are fast running out.As recently as 2014, years of outsize profits on crude had left the government sitting on net assets equivalent to 47% of gross domestic product. Since then, lower prices and incontinent spending have eroded Saudi Arabia’s nest egg with astonishing speed. Net debt will hit 19% of GDP this year, according to the International Monetary Fund, before rising to 27% next year, while coronavirus and oil-fight measures could push gross borrowing to 50% by 2022.That’s still modest by rich-country standards, but none is as leveraged as Saudi Arabia is to the price of a single commodity, as my colleague Liam Denning has written. Barring extraordinary cuts to its budget or a 2008-style oil price spike, the kingdom is likely to remain a net debtor for the foreseeable future. Lenders already appear to be taking notice. Thanks to the general virus-inspired market panic and the specific effects of the current oil-price war, five-year credit default swaps insuring against non-payment of Saudi Arabia’s debt are currently running at about 179 basis points. That puts the country in the company of India, Indonesia, and Russia in terms of perceived credit risks, and far worse than the likes of Spain, Portugal, Ireland and Iceland.Its sovereign bonds still have a weighted average coupon of 3.43% and maturity in the latter half of 2030, so for the moment things seem comfortable enough. But lower-for-longer oil prices could cause that outlook to unwind remarkably quickly, especially if the kingdom’s fast-shrinking foreign reserves start putting pressure on the riyal’s dollar peg.Despite the PIF’s shopping spree, there are signs that Riyadh is aware of how constrained its circumstances are starting to become. Last week's announcement of a ceasefire in the bloody five-year war in Yemen is welcome for humanitarian reasons — but it’s also necessary on a more pragmatic level. Saudi Arabia’s military spending is the third-biggest globally after the U.S. and China, and amounts to an extraordinary 8.8% of GDP — the highest share of any country for which the World Bank has recent data.The ceasefire is being attributed to the impact of Covid-19, but it’s hard not to notice that military spending this year will fall to its lowest level in a decade. When the finances get tight, you just don’t have the money to spend on a quagmire that you once did.That willingness to make cuts is welcome — but once you add the amounts dedicated to domestic security, some 28% of Saudi Arabia’s budget is still going on such expenditures. It’s not surprising that a government lacking popular legitimacy in the middle of a strife-torn region should be spending a lot of money on self-preservation. Still, a country where 40% of the 33 million-strong population is under 25 might want to invest more on health, education and other longer-term goals.It’s probably that 1 trillion riyal ($271 billion) government budget, rather than splashy overseas acquisitions, where the biggest savings need to be made right now. The message is the same, though: Riyadh needs to start cutting its coat according to its cloth, and fast.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.