Home Blog Page 185

Sverdrup’s Phase 1 Capex Estimated at $1 Bln Less

cDiver
-
0
Sverdrup’s Phase 1 Capex Estimated at $1 Bln Less

Statoil, the operator for the Johan Sverdrup development, has presented an updated capex estimate, for the first phase of the development, showing reduced capital expenditures as a result of positive market response in contracts and purchase orders.

In the Plan for Development and Operations (PDO), which was submitted to the Ministry of Petroleum and Energy (MPE) on February 13, 2015 and approved by the MPE on August 20, 2015, capex for the first phase development was estimated at NOK 117 billion in real terms (NOK 2015) and NOK 123 billion in nominal terms.

According to Oslo-listed Det norske, overall capex for the first phase has in the updated capex estimate been reduced by NOK 9 billion (approx $1.06 billion) from NOK 123 billion to NOK 114 billion in nominal terms, assuming the same currency assumptions as in the PDO. The contingency level (in NOK) is maintained in the updated estimate and reflects risks in scope, schedule and project execution.

 

 

 

Source

Oil, Bonds Go Their Separate Ways

cDiver
-
0
Oil, Bonds Go Their Separate Ways

The rebound in oil prices has not been enough to stop the bleeding at many US energy companies, whose bonds keep weakening – and whose ability to muster fresh capital is dwindling away.

Oil and bond prices are moving in opposite directions, underlining the market’s lack of confidence in a cash-strapped sector that is seeing its prospects go from bad to worse.

The difficulties will start intensifying next week, when banks begin their twice-yearly review to set ceilings on how much exploration and production (E&P) companies can borrow.

And with crude at US$45 per barrel – far below the US$60 minimum that underpins many E&P business models – the expected cut in borrowing bases will come as a double whammy.

Revenue is down, capital market access is limited and cash is in short supply – a sticky situation for even the healthiest of firms, and one that could well prove fatal for some.

“Oil prices in the mid-40s just don’t work for many of these companies,” said James Spicer, senior analyst for high-yield energy research at Wells Fargo Securities.

“The optimism over a 2015 price recovery has faded.”

The end of that optimism has spurred the decoupling of oil and bond prices, which normally are more closely correlated. (http://link.reuters.com/zez65w) (http://link.reuters.com/muz65w)

Rather than bouncing back in tandem with crude prices, which touched lows under US$38 in August, junk-rated E&P bonds have softened instead.

The Bank of America Merrill Lynch high-yield energy index – comprising 167 issuers with notional debt of US$210bn – is back near record wides at Treasuries plus 1046bp.

It has widened 75bp in September, while oil prices have remained flat since their recovery at the end of August.

“In the first eight months of the year, the correlation was 80%,” Brian Gibbons, an analyst at CreditSights, told IFR.

“But in the last three weeks that has declined considerably to 29%. There has been a break in the link.”

SIGNS OF DISTRESS

While the widening spreads can largely be blamed on sector concerns, many analysts say other factors are also in play.

The EPX index, which tracks E&P stocks, “has declined in the past couple weeks even as oil prices have recovered,” said Gary Stromberg, head of US high-yield research at Barclays.

“We think that is because the equity market had been pricing in higher oil price expectations than the commodity markets were showing, and is now coming more into balance.”

He said that “extremely weak” covenants have allowed issuers to sell second and first-lien debt that ranks above unsecured debt in the capital structure.

“As issuers have replaced debt ahead of the unsecureds, that has crammed the recovery on those unsecured bonds – and spreads have widened,” Stromberg said.

Secured bonds issued earlier this year, when the buyside was more optimistic about the outlook for the sector, have also tanked.

That has left bruised investors reluctant to make a second bad bet, especially when high-yield in general has seen spreads widen.

A US$700m secured issue sold by Texas-based E&P Comstock Resources in March at a 10% yield, is now trading at 73.5 and yielding 19%.

A US$1.45bn secured deal from Energy XXI the same month, which yielded 12% at the time, now trades at a cash price of 56 to yield 29%.

Both companies sold new debt ahead of expected cuts in their borrowing bases in the April redetermination period.

But that option is less viable this time around. Instead, companies are doing distressed exchanges on unsecured bonds.

Some companies, including Halcon Resources and Sandridge Energy, have done so just months after selling new bonds.

Unsecured bonds issued by Halcon fell to 35 from 50 after its recent distressed exchange.

“You can see how these events can be very disconnected from what is going on with oil prices,” said Stromberg.

LENDING PRESSURE

Regulators this time around are an added worry, as they put pressure on lenders to cut lines of credit to companies whose leverage is exceeding the six times ceiling limit and debt pay-down abilities in their leveraged lending guidelines.

The focus now is on how severely borrowing bases will be cut.

Gibbons at CreditSights estimates that companies in the BAML high-yield energy index have about US$100bn in these facilities between them. A 10%-15% cut would leave them with a sizeable shortfall – and some in the market think the cuts could be even larger than that.

 

 

 

 

Source

WHOI Gets RV Neil Armstrong

cDiver
-
0
WHOI Gets RV Neil Armstrong

Following completion of successful acceptance trials, the nation’s newest research vessel, the Neil Armstrong, was officially turned over by the U.S. Navy to the Woods Hole Oceanographic Institution (WHOI), which will operate the vessel as part of the national academic fleet.

In May 2010, the Office of Naval Research selected WHOI to operate the new vessel for advanced oceanographic research around the world. Named for the Apollo astronaut who first walked on the moon, the Neil Armstrong replaces the recently retired R/V Knorr, which had been in operation since 1970. The new ship will meet the academic community’s need for a general-purpose research vessel based on the East Coast of the United States.

“This occasion marks the beginning of a long association between the Armstrong and the Institution and the continuation of our heritage of operating research vessels in order to take science to sea,”said Rob Munier, WHOI VP for Marine Operations. “Our partnership with the US Navy, in particular our mission sponsor, the Office of Naval Research, is also reinforced today. The Navy has supported basic oceanographic research for decades and, with the investment in the Armstrong, will continue to do so for decades to come. WHOI is proud to have been selected by ONR to be the vessel operator.”

WHOI will operate the Neil Armstrong for the benefit of the U.S. ocean science community, coordinating its schedule through the University National Oceanographic Laboratory System (UNOLS). WHOI’s crew, many of whom served on the Knorr will serve on the Armstrong, with Captain Kent Sheasley in command.

“The U.S. Navy is proud to support the national research fleet by delivering state-of-the-art research vessels like the R/V Neil Armstrong,” said Chief of Naval Research Rear Adm. Mat Winter. “The Navy’s innovative scientific mission will directly benefit from this next generation research ship that incorporates advanced technologies and break through capabilities, enabling new discoveries.”

Over the next month, the new ship, which is 238 feet long and can undertake missions of up to 40 days, will be outfitted with the essentials it needs for operation, spare parts, food stores, and other basic equipment and consumables. In November, the ship will begin the transit to the US East Coast, with scheduled stops in San Francisco and the Panama Canal. The vessel is scheduled to arrive in the southeast US in December at a port and shipyard to be determined, where the ship’s science equipment will be installed and tested, in particular its sophisticated sonar systems and other sensors.

The ship is expected to undergo a series of shakedown and science verification cruises starting in February and March 2016, which will allow scientific users to test the ship and its systems and make any necessary adjustments before it is declared fully operational. The Neil Armstrong’s first science mission is planned for May 2016 in the North Atlantic.

“The R/V Armstrong is an exciting addition to the US oceanographic fleet, particularly for young scientists and future scientists,” said WHOI Senior Scientist Carin Ashjian.“For the next 50 years, the Neil Armstrong and anyone who sails on it will be at the forefront of scientific exploration. This is the ship that will help them make their careers. We know there are many discoveries yet to be made in the ocean, with great potential benefit to society. It’s fitting that the Neil Armstrong will enable the next giant leaps for mankind.”

“Today marks the launch of a new era of ocean research, building on the longstanding support of the U.S. Navy and the Woods Hole Oceanographic Institution for ocean science and exploration,” said Senator Edward J. Markey (D-Mass.). “We look forward to the Neil Armstrong landing on Massachusetts shores and continuing the legacy of scientific excellence anchored in Woods Hole and impacting the world.”

“For 85 years, the scientists and researchers at Woods Hole have been at the forefront of oceanographic discovery,” said Representative William Keating (D-Mass.). “The transfer of the R/V Neil Armstrong represents the continued role of the US Navy’s investments in furthering oceanography and the critical nexus of federal investments in independent, pioneering research. WHOI remains a premier research ship operator – not just for New England as an anchor for academic institutions and students in the region, but for scientists globally.”

 

 

 

 

Source

Oil Companies in Europe Seek Creative Funding as Lenders Retreat

cDiver
-
0
Oil Companies in Europe Seek Creative Funding as Lenders Retreat

Oil services companies in Europe are finding alternative ways to raise cash and repay debt after falling crude prices made it difficult for them to get funding from traditional sources.

Dolphin Group AS has sought to persuade private-equity and hedge funds to finance projects exploring and mapping seabeds in return for interest tied to sales, according to people familiar with the matter. At least two Norwegian drillers are planning to sell and lease back ships to raise cash and fund operations as they struggle to access loan and bond markets, said the people, who asked not to be identified because the matters are private.

Energy companies are being shut out of bond markets and lenders are reducing credit lines after prices dropped about 60 percent from last year’s peak. Services companies in Europe are starting to run out of cash as producers from Royal Dutch Shell Plc to Petroleo Brasileiro SA cut their own investments and delay projects.

“Bond markets are closed for these companies, especially small ones, and banks may not be lending to them at this stage,” said Nigel Thomas, partner at law firm Watson Farley & Williams in London. “Services companies need to buy time to survive during the downturn and alternative investors are able to give them that, albeit at a very expensive cost.”

Bonds issued by oil-services businesses globally dropped to $6.7 billion this year, on pace for the least in a decade, according to data compiled by Bloomberg. French oilfield surveyor CGG SA said it had to cancel a loan in July because banks had offered unfavorable terms.

Energy-services companies are searching for new investors and funding strategies as even lenders of last resort pull back. Hedge funds and private-equity firms that previously sought to lend at high rates are becoming reluctant to step in after getting stuck with losing positions.

Bonds of speculative-grade energy companies in dollars have lost 9 percent this year, while high-yield debt globally gained 0.3 percent, according to Bank of America Merrill Lynch Index data.

DATA SALES

Dolphin approached hedge funds and private-equity investors last month for a $50 million loan that would return about 15 percent annually, people familiar with the matter said. The Bergen-based company is working with a potential lender for a deal that will pay interest linked to data sales, Chief Executive Officer Atle Jacobsen said this month.

“We have never seen this type of funding in the industry before,” said Hakon Johansen, an analyst at Fondsfinans ASA in Oslo. “The market remains very weak, but Dolphin’s management wants to expand operations, hoping that someone in the end will buy their data.”

Dolphin, which had about $264 million of debt on June 30, also extended bond maturities and is considering ways to cut costs and improve liquidity as it awaits a rebound in demand, according to a report on Aug. 12.

The company’s bonds have plunged, according to data compiled by Bloomberg. Its 500 million kroner ($59.2 million) of notes due March 2019 are quoted at about 25 percent of face value.

LEASE BACK

Bergen-based Norshore Holding AS said it transferred control of its ship to creditors as part of a $150 million debt restructuring last month and leased it back to continue operating.

“The service industry is under enormous pressure as oil companies continue to strive for significant cuts,” said Terje Fatnes, an analyst at SEB Enskilda AS in Oslo. “Getting new liquidity in this market could be a painful exercise. For many companies, financial restructuring seems inevitable.”

 

 

 

 

Source

Shutdown at North Sea Buzzard Oilfield Likely to be Moved to November

cDiver
-
0
Shutdown at North Sea Buzzard Oilfield Likely to be Moved to November

A planned shutdown of Britain’s North Sea Buzzard oilfield is likely to be rescheduled to November from October, an industry source said, which would boost next month’s supply of the crude that helps underpin the Brent benchmark. Buzzard’s output is closely watched by traders as the field is the biggest contributor to the Forties oil stream, the largest of the four North Sea crudes used in the global Brent oil benchmark.

The exact details of the rescheduling have yet to be confirmed, said the source, who gave no reason for the likely change of date. Buzzard is operated by Nexen, a unit of Chinese state company CNOOC. Other field partners are Suncor Energy Inc and Britain’s BG Group, which is being bought by Royal Dutch Shell. Nexen, asked if the maintenance was still planned in October, had no immediate comment on Wednesday.

Buzzard pumps less than 0.2 percent of daily world oil supply but because it is the largest field contributing to Forties the field has a bigger impact on pricing than its size would otherwise justify. The field had suffered from frequent unplanned shutdowns, leading to volatility in prices, but this year it has operated more reliably and average output has risen to about 168,000 barrels per day (bpd) as of early September. 

 

 

 

 

Source

FMC Technologies Scoops Appomattox Contract

cDiver
-
0
FMC Technologies Scoops Appomattox Contract

FMC Technologies, has received an award from Shell Shell for its Appomattox deepwater development in the Gulf of Mexico.

FMC Technologies will provide Enhanced Vertical Deepwater Trees, subsea manifolds, topside controls, a control system, and a distribution system for the field, which lies in the Mississippi Canyon area of the eastern Gulf of Mexico in approximately 2194 meters of water, 140 nautical miles southeast of New Orleans.

“FMC Technologies has supported Shell’s subsea requirements for more than two decades, and this project represents the continued strength of that relationship,” said Tore Halvorsen, Senior Vice President, Subsea Technologies.

DAN Physiological responses to high pressure during immersion

cDiver
-
0
DAN Physiological responses to high pressure during immersion

Physiological responses to high pressure during immersion

The body’s physiological response to high pressure during immersion. Have you ever been bothered by any of this during your scuba dive? Gettin’ narced, equalization problems, the urge to relieve yourself, or headaches after diving?

Caren Liebscher

Gettin’ narced

Some love the feeling but not everybody experiences it – the narcotic effect of nitrogen, famous for depths at or beyond 30 meters. Its more poetic name, rapture of the deep, describes it very well. Signs and symptoms are pretty silly behavior. People mostly have a crazy smile on their faces and show movements similar to drunkenness. Divers often report a sense of joy, wellbeing or euphoria. People are not equally susceptible and, besides this individual difference, the effects it can also differ in the same individual from one day to the other.

Generally you can say: the rapture of the deep is triggered by an increased nitrogen partial pressure which interferes with the communication between nerve cells. When nitrogen partial pressure decreases, the symptoms of the rapture of the deep disappear.

But how does it happen physiologically?

First of all – according to P.B. Bennett – the narcotic effect is believed to be of physical and not of biochemical nature. Its main target is our central nervous system (CNS). It’s probably best explained by theMeyer-Overton-Hypothesis. Narcosis happens when the inert gas – Nitrogen – penetrates the lipids of the brain’s nerve cells and interferes with the transmission of signals from one nerve cell to the other.

For the nerds among the divers: Nitrogen is making up 78% of our air. On land there is one atmosphere of pressure (i.e. the partial pressure of Nitrogen is 0.78), while at 10m in the water we are breathing under two atmospheres of pressure, meaning twice the pressure (i.e. the partial pressure of Nitrogen is 1.56). With increasing pressure while descending beyond 10m, the partial pressure of nitrogen increases (at 20m it’s 2.34, at 30m it’s 3.12 and so forth).

While some people compare it to the effect of LSD, other smart people compared the mental impairment by nitrogen narcosis to having a martini on an empty stomach. This is why the same smart people called it theMartini Effect.If narcosis hits you and no one pulls you back up and you keep descending, then for every subsequent 10-15m the effect on mental impairment is the equivalent of having had one more martini. Narcosis itself is not life-threatening, but your responses to your environment or any equipment problems underwater could be. As any right-minded person wouldn’t drive drunk, you shouldn’t continue diving narced.

To avoid narcosis, it doesn’t help to drink alcohol the evening before the dive or if you feel stressed, overworked or anxious. These factors will all multiply the narcotic effect or trigger it more easily. Further influencing factors can be hard work, cold water, fear, descent rate, fatigue, illness, medication, obesity, and probably more. Your best life insurance, if you are prone to Nitrogen narcosis, is your dive buddy who just needs to pull you in shallower depths as soon as you start acting weird.

Besides Nitrogen also gases like Helium, Neon, Argon, Krypton and Xenon are inert gases and can cause gas narcosis by solving in the nerves’ lipoids and interfering with their electric signals. The narcotic effect of inert gases depends on the degree of their fat solubility and differs between the different inert gases. Helium has less lipoid solubility and therefore a less narcotic effect. So, deep divers use it. Xenon has the highest lipoid solubility and therefore a high narcotic effect. It is actually used for anesthesia in medicine. Nitrogen ranges somewhere between these two. It is narcotic under pressure.

Equalization problems

Equalizing your ears is what most of us have learned even before they started diving, namely when they had their medical check-up whether they were fit to start scuba diving at all. The ENT usually asks you to clear your ears.

In scuba diving equalizing is a necessity in order to protect your eardrum, a very subtle membrane in your ear, from bursting due to increased pressure underwater while you are descending. With a hole in your eardrum you not only hear less but also water can come in and irritate your balance system (which sits in the vestibular organ in your inner ear). Besides, a ruptured eardrum also hurts and will keep you from diving for several months. If not healed properly, you can suffer from permanent hearing loss, vertigo and inflammation. So, better make use of the Eustachian tube inside your skull that connects your ear with your throat and enables you to push air against the inside of your eardrum. This will compensate – or equalize – the pressure from the outside. The deeper you descend, the more pressure will again push on the outer side of your eardrum. This is why you have to repeat the procedure many times when going down. The best is to equalize your ears early enough and often enough!

Since we are all different and some people have difficulties equalizing their ears it is nice to hear there are at least 5 different techniques for equalization. Pick the best for you!

  1. Valsalvatechnique: simplest, well-known technique. Pinch your nose and blow air in it.
  2. Toynbeemanoeuvre: close your nostrils and swallow. This opens the Eustachian tubes and the tongue movement will push air into them.
  3. Frenzelmanoeuvre: close your nostrils and the back of your throat and try to make a “k sound”. This needs a bit of practicing.
  4. Edmundstechnique: tense your soft palate and throat muscles. Push your jaw down and outwards and try the Valsalva. (It’s difficult)
  5. Voluntarytubal opening: many freedivers know and use this technique. It needs practicing. Contract the muscles in your throat and move your jaw downward and forward. It’s a bit like trying not to yawn. By this movement, the Eustachian tubes open up, enabling you to equalize.

If you keep having problems equalizing your ears, you should go to a specialist and have your ears checked. Don’t force anything. You can ‘blow up’ your eardrum. After all, it’s a very fine membrane.

The urge to relieve yourself

With submersing into water a lot of physiological changes take place due to changes in temperature, gravity, oxygen absorption and, simply, the dive reflex.

Our cardiovascular system deals with the most important changes while adapting to the “new” environment by a so-called blood shift. Through the increased ambient pressure and its compression on our veins,especially indeeper immersed body parts, the blood of the legs is squeezed towards the body’s core, i.e. the abdomen and chest (if the diver is positioned vertically with head up). Approximately 400 to 800 ml of the venous blood are being shifted this way. The little capillaries – arterioles that surround the alveoli of the lung – hold this blood like a sponge and act against the pressure. This blood shift irritates the blood volume regulatory circuit. It activates the sensors but instead of real blood volume increase this is caused only by a volume shift. It triggers a whole physiological chain which was described first by Gauer and Henry and therefore called the Gauer-Henry-Reflex: the expansion of the thorax by the volume shift of blood and plasma activates receptors on the heart and the lungs which in turn signal the kidneys – via nerves and hormones – to increase urine secretion. The overall goal is to relieve the heart. Because of the surge of blood the heart has to work more which it compensates by a larger stroke volume. The heart rate stays almost the same. In short: immersion triggers increased kidney activity and higher urination which leads todehydrationand electrolyte deficiency in the long run. To compensate for it it is advisable to start hydrating– drinking water – two hours before a dive and also in between dives.

Furthermore, if you have ever encountered headaches after diving, the reason for it might have been one of these:

  • dehydration
  • a squeezing mask
  • too much alcohol the evening before
  • bad breathing technique while scuba diving (e.g. skip-breathing can accumulate carbon dioxide)
  • no sleep
  • sunstroke
  • ear/equalization problems caused, for example, by congestion of your sinuses
  • signs and symptoms of DCS

If headaches don’t resolve quickly, you may need to see a doctor.

 

 

 

 

Source

Focal, MacArtney Enter Sales and Service Partnership

cDiver
-
0
Focal, MacArtney Enter Sales and Service Partnership

Focal Technologies Corporation, a Moog Inc. company, has entered into a sales and service partnership with MacArtney Singapore Pte. Ltd.

The sales and service partnership agreement between Focal and MacArtney will become effective from October 1, 2015. MacArtney Singapore holds a track record as a Moog Focal product service provider.

MacArtney service facility is capable of performing complete refurbishment, repair and maintenance of all standard Moog Focal products, the company said.

“Rest assured that we provide short lead time system service without the constraints of time zone differences and complex logistics – and at the end of the day, this will mean less system downtime,” says Steen Frejo, MacArtney Singapore Managing Director and continues, “We have high expectations for this new sales and service partnership and look forward to addressing any quote, order, repair or technical support requested by Focal customers with due and timely care.”

Saturation diving tests support claims for hydrogen breathing mix

cDiver
-
0
Saturation diving tests support claims for hydrogen breathing mix

On June 28, 1996, four Comex divers left their saturation chambers following 12 days of confinement. In line with the objectives of Hydra 12, the latest in a series of experimental dive programs by Comex, they had achieved eight working dives at a depth of 210 meters over a five-day period.

The exercise was performed offshore Cannes, southern France at a spot sheltered from the prevailing east and west winds. Four of the dives were performed breathing the standard helium mixture heliox, with the rest managed by breathing the newer hydreliox mix of hydrogen, oxygen and helium. Comex has been pushing hydreliox for some time as a better medium for saturation diving in moderate water depths.

On a repetitive basis, the divers connected various pipe sections on a specially constructed sea-floor working platform: the aim was to compare their performance when using the two breathing mixtures alternately. Each dive lasted from two to six hours, depending on the tasks involved. These comprised:

  • vertical installation of riser bottom section.
  • alignment of the riser with the straight pipeline section and adjustment of the inter-flange gap.
  • installation of spool-piece and fitting of threaded rods.
  • installation of Hydratight torquing system.
  • disassembly of the assembled parts and reconfiguration in the initial state for the next dive.

According to Comex, divers breathing the hydrogen mixture demonstrated a higher efficiency with regard to task analysis and also a greater working capacity when the manipulations demanded a sustained effort. A spokesperson commented: “The ergonomic effectiveness of hydrogen was thus clearly demonstrated in actual open sea working conditions. It is now proven that hydrogen is the best component in breathing mixtures for mid-deep or very-deep dives.

“The helium to hydrogen and hydrogen to helium switches were also perfectly mastered at both physiological and technical levels.

“Following the hydreliox dives, the Doppler ultra-sound tests showed no circulating bubbles in the divers’ cardiovascular system. This proves beyond doubt a perfect hydrogen dosage within the breathing mixture. “In addition, the `surface loop’ closed circuit breathing system worked perfectly giving evidence of its total reliability and demonstrating how easy it could be to add a `hydrogen out’ deck container on a helium-diving support system.”

Comex maintains there is a long-term role for divers, despite the advances in diverless technology below 200 meters. Four years ago the hydrogen mix was used successfully on Hydra-10, which involved a simulated 701 meter depth dive at the company’s hyperbaric research center.

As back-up for these latest trials, the vessel spread included the underwater operations support barge Nyroca and the INPA (National Professional Diving Institute) diving support barge. Nyroca, moored to four buoys, supported the submerged working platform which was suspended by a cable to the 210 meter test depth.

The divers breathed standard helium mixtures within INPA’s saturation chambers, switching to hydreliox for their seabed tasks. The hydrogen-adapted gas reclaim system loop was linked to the diving assembly via the bell umbilical. Oceanographic research ship Minibex monitored the divers in situ using its ROV Super Achille. Outside observers watched the tests from the transparent hull of the submarine Remora 2000.

Comex claims the helium-in/hydrogen-out technique could be adapted to most saturation systems on the large DSVs operating in the North Sea, Brazil, and Gulf of Mexico.

 

 

 

 

Source

Russian Deputy PM Opposes Oil Tax Plan

cDiver
-
0
Russian Deputy PM Opposes Oil Tax Plan

Russia’s Deputy Prime Minister Arkady Dvorkovich has criticised finance ministry proposals to increase tax receipts from oil companies, saying on Thursday the measures would undermine the whole oil industry. Russia is seeking ways to replenish state coffers hit by an economic downturn, due to the plummeting price of oil, its main export, as well as international sanctions over Moscow’s role in the Ukrainian conflict.

“The changes in such sensitive sectors should be moderate and carefully made,” Dvorkovich told reporters. “It is unrealistic the way the finance ministry had proposed it, this would lead to gravest consequences for the (oil) industry.” The ministry last week proposed changing the mechanism for mineral extraction tax (MET) calculation to bring in about 600 billion roubles ($9 billion) in additional revenue in 2016.

The proposal has already attracted criticism from the economy and energy ministries, which warned it could hit oil output. German Gref, the head of Russia’s top lender, Sberbank , said domestic oil companies had signed a letter, outlining potential losses of 100 million tonnes in oil production in the next three years from the proposed measure. He also said the proposal would be discussed on Monday at a meeting with Prime Minister Dmitry Medvedev.

Alexander Dyukov, the head of Russia’s oil producer Gazprom Neft, said the increase in the tax burden may lead to breaches in debt covenants if the state went ahead with it. Russia’s economy is expected to shrink by between 3.9 and 4.4 percent this year and the government is looking for additional sources of revenue. ($1 = 66.5205 roubles) 

 

 

 

Source

1...184185186...701Page 185 of 701
© Newspaper WordPress Theme by TagDiv