Guyana arbitration scheduled for 2025: Chevron, Hess
Chevron and Hess said an arbitration hearing over a disputed stake in a giant offshore oil find in Guyana has been scheduled for next year, effectively delaying their proposed $53bn merger.
The future of the stake, which is the crown jewel of Chevron's takeover of the US independent Hess, has been thrown into uncertainty after ExxonMobil argued it has a right of first refusal to Hess' stake. The matter has been referred to international arbitration in Paris and a hearing has been scheduled for May next year, with a decision expected over the following three months.
"Chevron and Hess had expected and requested that this hearing be held earlier, but the arbitrators' common schedules did not make this possible," the two companies said in a joint statement.
The companies said they remain confident that the arbitration will confirm a right of first refusal does not apply to their merger.
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Mexico 2Q GDP data, surveys point to slower economy
Mexico 2Q GDP data, surveys point to slower economy
Mexico City, 2 August (Argus) — Private-sector analysts have lowered estimates for Mexico's 2024 and 2025 gross domestic product (GDP) growth while raising inflation forecasts for both years, the central bank said Thursday. For a fourth consecutive month, the survey's median forecasts for GDP growth in 2024 declined, with analysts polled lowering growth estimates to 1.8pc for 2024 from 2pc in last month's survey. The 2025 growth forecast slipped to 1.61pc from 1.78pc. The shift in forecasts arrives on the heels of preliminary second quarter GDP data, posted by statistics agency Inegi 30 July, showing the economy grew by an annual 2.2pc in the second quarter, up from 1.6pc in the first quarter but slowing from 3.5pc in the second quarter 2023. The central bank's 2024 GDP estimate was lower than a 2.4pc estimate from Mexican bank Banorte. Median projections for end-2024 inflation in the central bank's private-sector survey for July moved to 4.58pc from 4.23pc, with end-2025 projections rising to 3.83pc from 3.76pc in the June survey. The central bank cited higher risks to inflation from a weakening peso and a potentially severe hurricane season in its latest monetary policy decision on 27 June when it held its target interest rate at 11pc. The peso weakened above 19 pesos to the US dollar Friday for the first time since January 2023, extending the losses triggered after 2 June elections that effectively erased congressional opposition to the progressive Morena party. It has weakened from 16.3 pesos to the dollar early April, its strongest level in more than eight years. Growth in the industrial sector grew by an annual 1.9pc in the second quarter from 0.9pc in the first quarter, while services grew by 2.7pc in the second quarter from 2.1pc in the prior quarter, according to the latest GDP report. Agriculture contracted by 2.7pc in the second quarter from 0.6pc growth in the first quarter. "The economy's exceptional momentum in previous years may be running out of steam," said Mexican bank Banorte in a note on the GDP report. Banorte noted uncertainty in manufacturing, "although some of the early nearshoring-related investments could begin to result into more production. In addition, the auto sector remains strong, key to driving the category forward." The downtrend is supported by comments from ratings agency Moody's out this week, predicting a "substantial slowdown" in the second half of 2024. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vz unrest no threat to Trinidad gas projects: Minister
Vz unrest no threat to Trinidad gas projects: Minister
Kingston, 2 August (Argus) — Increasing political instability in neighbouring Venezuela will not affect major offshore natural gas projects in Trinidad and Tobago, energy minister Stuart Young said. The three gas projects being developed under agreements with Shell and BP "will be seen to their fruition," Young said. Protests have erupted in Venezuela after electoral authorities named president Nicolas Maduro the winner of the 28 July election. But several countries — including the US — declared the opposition's Edmundo Gonzalez as the winner . Trinidad and Tobago will continue to develop the cross-border gas projects "as our economy is based on oil and gas, and we are committed to developing them and to earning the revenue streams from these projects," Young said. But the projects "are inevitably being clouded by domestic developments in Venezuela," a Caribbean diplomat in the capital Port of Spain told Argus . "It is possible Washington will stiffen some sanctions it had moderated months ago to allow some of the gas projects to proceed." Trinidad and Tobago and Venezuela last month signed a 20-year exploration and production agreement for the Cocuina gas field that is part of a field that straddles the countries' borders. BP and Trinidad's state gas company NGC will develop the field. Shell made a final investment decision on the shallow-water 2.7Tcf Manatee cross-border field, the company said last month. Shell and NGC are developing the Dragon field that sits on the border with Venezuela and which the companies say contains an estimated 4.3Tcf of gas. Trinidad needs gas to reverse a drop in production that has depressed LNG, petrochemical and fertilizer production. The country's 2023 natural gas production of 2.6 Bcf/d was 3.7pc less than in 2022, according to energy ministry data. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth slows sharply in July, jobless rate rises
US job growth slows sharply in July, jobless rate rises
Houston, 2 August (Argus) — The US added 114,000 nonfarm jobs in July, much less than expected, as the jobless rate rose and average hourly earnings growth fell, all signs of an almost certain rate cut from the Federal Reserve next month. Job gains followed downwardly revised gains of 179,000 in June and 216,000 jobs in May, the Bureau of Labor Statistics reported today. Gains were revised down by 29,000 for the two months. Gains in July were well below the average 215,000 jobs added monthly for the prior 12 months. The unemployment rate rose to 4.3pc from 4.1pc. Fed policymakers this week kept their target rate unchanged at 5.25-5.5pc, a 23-year high, but Fed chief Jerome Powell said a possible rate cut was "on the table" for September should the data — especially easing inflation pressures and weakening labor market conditions — keep moving in the right direction. After the jobs report today, the CME's FedWatch tool showed 67.5pc odds of a 50 basis point cut, and 32.5pc probability of a 25 basis point cut at the September meeting, compared with 22pc and 72pc odds, respectively, on Thursday. A rate cut in September would come less than two months before the November national election and would be the first cut since early 2020, when Covid-19 struck the US. Job gains were led by health care, construction, transportation and warehousing. Health care added 55,000 jobs, construction added 25,000 and transportation and warehousing added 14,000 jobs. Manufacturing added 1,000 jobs compared with losses of 9,000 jobs in June. Mining, which includes oil and gas exploration and production, shed 1,000 jobs. Average hourly earnings rose by an annual 3.6pc, down from 3.8pc in June and the lowest since May 2021. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Key Opec+ panel gives no clues on plan to unwind cut
Key Opec+ panel gives no clues on plan to unwind cut
Dubai, 1 August (Argus) — The ministerial committee that oversees compliance with Opec+ oil production policy made no recommendations for the group to change course at its virtual meeting today. But crucially, the committee also gave no hints as to whether a gradual unwinding of up to 2.2mn b/d of supply reductions will start in October as planned. The Joint Ministerial Monitoring Committee (JMMC), which now meets every two months to oversee compliance with crude output pledges and study market dynamics, gave little away about its view of current supply and demand balances or where it sees the market through to the end of the year. The meeting took place against a backdrop of weakening oil prices over the past month, although the twin assassinations of key leaders of the Iran-backed Hezbollah and Hamas militant groups in Lebanon and Tehran, respectively, over the past 48 hours has reversed some of those losses. Front-month Ice Brent futures are now trading at around $81.50/bl, up from around $78/bl two days ago but still well down on the $86.50/bl at the start of July. Today's JMMC meeting was the last one scheduled before a sub-group of eight Opec+ countries, led by Saudi Arabia and Russia, must decide whether to go ahead with a plan to start unwinding 2.2mn b/d of extra voluntary supply cuts that they have been implementing since January. The plan — to begin returning the barrels over a 12-month period starting in October — was announced at the last full ministerial Opec+ meeting in June. But it is not a foregone conclusion. At the June meeting, key Opec+ ministers, including Saudi Arabia's Prince Abdulaziz bin Salman, were at pains to stress that the production increase could be paused or reversed depending on market conditions. It was one of several decisions taken that day relating to three separate production cuts that the group has been carrying out since the start of 2023, amounting to a nominal 5.9mn b/d in total. If the 2.2mn b/d cut is unwound as planned, the collective output target of the eight countries would increase by 540,000 b/d over October-December this year and by another 1.92mn b/d over the first nine months of next year. That factors in a 300,000 b/d increase that the UAE has secured to its 2025 production allowance, which will be phased in between January and September next year. Tough decisions The JMMC reiterated today that "the gradual phase-out of the voluntary reduction of oil production could be paused or reversed, depending on prevailing market conditions". In essence, this is an assurance that the group of eight, dubbed "the great eight" by UAE energy minister Suhail al-Mazrouei, will only return those barrels if there is space in the market to do so. With lingering question marks on the prospects for Chinese oil demand growth this year, a relatively soft summer driving season in the US and strong supply growth from producers outside Opec+, the eight countries may need to consider delaying production increases. The JMMC also once again underlined the importance of member countries fully complying with their output pledges, noting last week's submission by Iraq, Kazakhstan and Russia of plans detailing how they intend to compensate for producing above target in the first half of 2024. The JMMC is due to meet next on 2 October, but a decision on whether to begin unwinding the 2.2mn b/d will likely be communicated early next month. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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