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Oct 18

UPDATE 1-Statoil to unveil size of giant oil find in 2 weeks


* N.Sea find could be 3rd biggest ever made off NorwayBy Henrik StolenOSLO, Oct 18 (Reuters) - Norway’s Statoil said a major oil find, described as a “giant” by a partner last month and seen as giving new life to fading North Sea production, was significant and it would aim to give a more precise estimate of the size within two weeks.Statoil said that an appraisal well in its Aldous Major South structure showed a “significant” amount of oil.The discovery has revived prospects for the North Sea, a mature oil region largely written off by the oil majors as a promising area for new exploration.Oil minnow Lundin Petroleum said last month that Avaldsnes/Aldous Major South, which could already be the biggest oil find made so far this year, may hold 1.2 billion to 2.6 billion barrels of oil equivalent (boe).At 2.6 billion barrels, it would be the third-largest made on the Norwegian shelf, surpassed only by the Statfjord and Ekofisk fields which kicked off Norway’s oil era in the 1970s, each field with more than 3 billion barrels.Statoil, one of Lundin’s partners in the find, declined at the time to confirm the Swedish company’s estimates, saying that it had to make more analysis of its own.So far, Statoil believes Aldous Major South on its own may hold between 400 million and 800 million boe. On Tuesday it said the appraisal well at Aldous Major South was promising.”Discoveries are always positive, and this is a significant oil column,” Statoil spokesman Ola Anders Skauby told Reuters, adding that the company hoped to have a volume estimate for the find within “a couple of weeks”.Statoil shares were trading 0.51 percent higher at 0855 GMT on an Oslo bourse whose main index was flat.Shares in Det norske , which has a stake in Aldous Major South, were up 8 percent while Lundin shares were up 5.53 percent.NEW LIFE IN MATURE OIL REGIONAvaldsnes, which is connected to Aldous Major South even though it lies in a different production licence, is estimated to hold between 800 million and 1.8 billion boe, according to Lundin, up from 100 million to 400 million it previously saw.By comparison, Buzzard, Britain’s largest oilfield which feeds into the benchmark UK Forties crude oil production stream, was found 10 years ago with reserves of around 500 million boe.The biggest new UK oilfield now in the news, which BP has just announced it will be developing off the west of Shetland, is the 640 million-barrel Clair Ridge oilfield.On average over the last 10 years, new oilfields discovered in the UK sector of the North Sea have contained only around 20 million barrels.Avaldsnes/Aldous Major South could make up a fifth of Norway’s oil supply from 2020, rising to over half by 2027, consultancy Wood Mackenzie said earlier this month.Lundin expects production to start in 2017 while Statoil believes it will more likely be in 2017-2018. .The Norwegian Petroleum Directorate (NPD), the agency tasked with managing Norway’s oil and gas resources, has been more cautious, however, suggesting it could be in 2018-2019 before the field can produce.The NPD, like Statoil, has not confirmed Lundin’s numbers as it carries out more analysis on the size of the find, although it does believe that the find is undoubtedly large.It expects to book the discovery in Norway’s overall resource estimates early next year.Norway is the world’s eighth-largest oil exporter and the second largest for gas. Oil production peaked in 2001 and has fallen since. In 2010 the Nordic country produced 1.8 million barrels per day.Lundin is the operator of Avaldsnes with a 40 percent interest. Statoil has a 40 percent interest, and Maersk Oil, a unit of Danish shipping giant Maersk (MAERSKb.CO), has a 20 percent interest.Statoil is the operator of Aldous Major South and has a 40 percent stake. The other partners are Det norske oljeselskap with 20 percent, Lundin with 10 percent and Norwegian state-owned firm Petoro with 30 percent.

Posted 7 months ago

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Oct 17

The Obama administration’s biggest macroeconomic mistake


I’m late to Ezra Klein’s big article about whether the Obama administration could have avoided our current economic woes, because I was having dinner last night with the head of the Bureau of Economic Analysis, and I wanted to see what he had to say first. And I’m glad I did! In any case, here’s Ezra, who looks at the famous chart projecting falling unemployment with the stimulus plan — something which, obviously, never happened. To understand how the administration got it so wrong, we need to look at the data it was looking at. The Bureau of Economic Analysis, the agency charged with measuring the size and growth of the U.S. economy, initially projected that the economy shrank at an annual rate of 3.8 percent in the last quarter of 2008. Months later, the bureau almost doubled that estimate, saying the number was 6.2 percent. Then it was revised to 6.3 percent. But it wasn’t until this year that the actual number was revealed: 8.9 percent. That makes it one of the worst quarters in American history. Bernstein and Romer knew in 2008 that the economy had sustained a tough blow; they didn’t know that it had been run over by a truck. This is an argument I’m very sympathetic to. There’s a counter-argument, which Ezra goes into at some length, which says that even if we’d known how bad the economy was at the end of 2008, it simply wasn’t politically possible to get a bigger stimulus than the one we got. But how far off were we, really? I talked to the director of the BEA, Steve Landefeld, last night, and he made the case that we weren’t all that far off. If he’s right, the Romer and Bernstein projections wouldn’t have been all that different even if we’d known the exact figure. One thing it’s important to remember, here, is that the numbers Ezra’s quoting are quarterly figures which are then annualized by raising them to the fourth power. So what we’re actually talking about, for the fourth quarter of 2008, was en estimate that the economy had shrunk by 0.9% that quarter, which was ultimately revised to say that the economy had in fact shrunk by 2.2%. That’s a big difference, of 1.3% of GDP in one quarter alone. So how come, if you look at the size of the recession as a whole, the revision actually seems to shrink, to just 1%? The revised estimates show that for the period of contraction from 2007:Q4 to 2009:Q2, real GDP decreased at an average annual rate of 3.5 percent; in the previously published estimates, it had decreased at a rate of 2.8 percent. The cumulative decrease over the six quarters of contraction is now estimated as 5.1 percent, compared with 4.1 percent in the previously published estimates. The problem here is that the “previously published estimates” were the ones which came out a few months after the Romer-Bernstein graph, showing the economy shrinking by 6.3% in the fourth quarter of 2008. Here’s the BEA’s chart; note that it simply doesn’t show the 3.8% estimate. But what this chart does show is that the really big miss, as far as GDP statistics are concerned, was in the fourth quarter; the other quarters weren’t nearly as bad. And I just don’t believe that a single datapoint for advance GDP would have thrown off the unemployment estimates of some of the world’s smartest economists by that much. Would Romer and Bernstein have projected slightly higher unemployment numbers if they’d known the truth about GDP? Probably. But I doubt they’d have been substantially higher. And there’s no way that their “with stimulus plan” estimates would have gotten anywhere near 10%. Ezra does a very good job of explaining why that is. Romer and Bernstein were basically treating the recession as though it were a common-or-garden cyclical downturn. Which was a big mistake, and one which was pointed out in March 2009 by Carmen Reinhart and Ken Rogoff. “The recessions that follow in the wake of big financial crises tend to last far longer than normal downturns, and to cause considerably more damage,” they wrote, adding that “so far the U.S. experience has mirrored past deep banking crises around the world to a remarkable extent”. And economies simply do not recover quickly from deep banking crises — financial crises, as a rule, cause L-shaped recessions rather than V-shaped ones. The fiscal prescription for an L-shaped recession is very different from the fiscal prescription for a V-shaped recession. And what we got was a prescription for something which would accelerate the pace at which we recovered. It was not something which would try to fix the fundamental problem of overleverage, which both caused the crisis and which now threatens to hold back the economy for a decade or more. Here’s Ezra: In late 2008, when the economy was cratering, Holtz-Eakin convinced McCain that the way out of a housing crisis was to tackle housing debt directly. “What we proposed at the time was to buy up the troubled mortgages, pay them off and let people refinance at the lower rates,” he recalls. “That would have filled up the negative equity and healed bank balance sheets.” To this day, Holtz-Eakin thinks the proposal made sense. There was one problem. “No one liked that plan,” he says. “In fact, they hated it. The politics on housing are hideous.” The Obama administration, perhaps cognizant of the politics, was not nearly so bold. It focused on stimulus rather than housing debt. The idea was that if people could keep their jobs and pay their bills, they could pay their mortgages. But today, few on the Obama team will mount much of a defense of its housing policy. Overall, I’m still unhappy with the state of macroeconomic statistics. I’m not necessarily unhappy with the BEA itself, which basically just has the job of cobbling together GDP data from a very disparate set of inputs, many of which — especially when it comes to the financial sector — are of surprisingly low quality. But I do think that we’d be much better off with a coherent, unified, and well-funded system of data-gathering, rather than outsourcing it to dozens of different public and private sources. And I’m definitely (albeit with hindsight) unhappy with the way in which the Obama administration hasn’t even tried to fundamentally tackle the enormous amount of debt in the US economy, and the way in which that debt overhang is likely to hold back economic growth for the foreseeable future. We’re turning Japanese, here, and we’re not doing a damn thing about it.

Posted 7 months ago

212 notes

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Oct 13

Russia’s EuroChem interested in K+S nitrogen ops


EuroChem owns 8.1 percent of K+S.Last month it acquired nitrogen fertiliser plants from BASF (BASFn.DE), prompting K+S to announce that it might divest its own nitrogen operations.

Posted 7 months ago

52 notes

Russias, EuroChem, interested, in, K+S, nitrogen, ops,

Oct 11

MOVES-Renaissance Capital, SAV Credit, Lasalle


GOTTEX FUND MANAGEMENT HOLDINGS LIMITEDThe asset management group appointed Steven Lee Hyungwk as Marketing Director for the Asia Pacific region. Previously, He was a member of the marketing team at Wellington Management Company.BANK OF AMERICA MERRILL LYNCHBofA-Merrill Lynch appointed Ian Ferguson as a Managing Director in UK Investment Banking. Previously, Ferguson was a Senior Managing Director in Corporate Advisory at Evercore Partners.LASALLE INVESTMENT MANAGEMENTChris Brett is named to the newly-created position of European Head of Strategic Partnerships. Previously, Brett headed the International Desk of Jones Lang LaSalle in London.SAV CREDIT LTDThe UK-based credit card provider appointed Ali Chaudhry as Managing Director and Chief Risk Officer. Previously, Chaudhry was Managing Director of Barclaycard’s open market businesses in the UK.RENAISSANCE CAPITALThe investment bank appointed John Hyman as Co-Head of Investment Banking and Financing (IBF), based in Moscow.

Posted 7 months ago

46 notes

MOVESRenaissance, Capital, SAV, Credit, Lasalle,