Oil Prices

[CityFarmer]

Malaysia slashes its budget. Malaysia government is expecting a prolong low oil price, a new normal in oil market. It has voted with US$55 a barrel...

Malaysia slashes 2015 budget, cuts growth forecast

KUALA LUMPUR — Malaysia cut its economic growth forecast for this year and announced austerity measures after tumbling oil prices forced the government to slash its budget.

Prime Minister Najib Razak says the 2015 budget, announced in October last year, was based on oil prices averaging US$100 (S$133.80) a barrel but this projection was no longer realistic as global crude prices have dropped by over 50 per cent.

He says the government lowered its oil price forecast to US$55 a barrel, which will lead to a revenue shortfall of 8.3 billion ringgit (S$3.1 billion). Mr Najib says the government will slash its operating expenditure by 5.5 billion ringgit.

Mr Najib added today (Jan 20) that the economy is forecast to grow between 4.5 and 5.5 per cent this year, down from an earlier estimate of 5-6 per cent. AP
http://www.todayonline.com/world/asia/ma...h-forecast

[yewkim]

Next bomb is close to home..Malaysia. be prepare, all because of low oil prices http://www.reuters.com/article/2015/01/1...II20150112

[CityFarmer]

KKR, has doubled up, and watching like a vulture, on special situations due to lower oil price...

KKR said to target oil, Asia with US$3 billion distressed fund

NEW YORK (Jan 21): KKR & Co is seeking as much as US$3 billion to provide financing to troubled companies including those hurt by plunging oil prices, according to two people familiar with the matter.

The private equity firm, run by billionaires Henry Kravis and George Roberts, is targeting US$2.5 billion to US$3 billion for its second special situations fund after deploying the previous pool more quickly than it expected, said the people, who asked not to be named because the information isn’t public.

KKR started marketing the fund to clients about six months after closing the first vehicle last January, the people said.

KKR is seeing opportunities to invest in oil and gas producers that came under pressure after the price of oil plunged about 57 since peaking in June.

The firm also expects some Asian companies to become starved for capital as banks address their nonperforming loan portfolios, the people said.

“It’s going to be a great opportunity” for the special situations group, Kravis said of the drop in oil prices at a Dec 10 conference.

“There’s a lot of debt out there today that is trading at pretty big discounts from par just because of the question, will some of these companies be able to survive.”
...
http://www.theedgemarkets.com/sg/article...essed-fund

[opmi]

^^ one thing about US corporate debt market is the
bankruptcy process is well-oiled. Even bankrupt companies can be revived
with debt holders becoming new equity owners. And the companies turned from
High leveraged to low leveraged. Eg Worldcom.

[CityFarmer]

^^ one thing about US corporate debt market is the
bankruptcy process is well-oiled. Even bankrupt companies can be revived
with debt holders becoming new equity owners. And the companies turned from
High leveraged to low leveraged. Eg Worldcom.

The "vulture" funds aren't only US-focus, but also Asian distressed companies. Those highly geared O&M players, are the ones been watched, I guess...

[CityFarmer]

One more bearish view on O&G sector...

Halliburton, Baker Hughes to lay off thousands as oil slumps

DUBAI (Jan 21): Oilfield service providers Baker Hughes and Halliburton plan to cut thousands of jobs as drilling activity slows further due to a steep fall in crude oil prices.

Global oil prices have tumbled almost 60 percent since June, hitting five-year lows as growing production and tepid global demand has caused a supply glut and prompted oil producers to scale back spending.

"We expect our headcount adjustments to be in line with our primary competitors," Halliburton's Chief Operating Officer Jeffrey Miller said on a post-earnings call on Tuesday, without giving a specific number.

The company, which employees more than 80,000 people, said it cut 1,000 jobs in its operations in the eastern hemisphere in the fourth quarter.

Baker Hughes, which is being acquired by Halliburton in a near-US$35 billion deal, said earlier in the day it would lay off 7,000 employees.

The job cuts, which come days after industry leader Schlumberger said it would cut 9,000 jobs, underscore the abrupt slowdown in drilling activity seen in the past two months.

The US land rig count has fallen by 250 rigs, or about 15 percent, over the last 60 days, Halliburton Chief Executive Dave Lesar said on the call.
...
http://www.theedgemarkets.com/sg/article...oil-slumps

[Belg]

One more bearish view on O&G sector...

Halliburton, Baker Hughes to lay off thousands as oil slumps

DUBAI (Jan 21): Oilfield service providers Baker Hughes and Halliburton plan to cut thousands of jobs as drilling activity slows further due to a steep fall in crude oil prices.

Global oil prices have tumbled almost 60 percent since June, hitting five-year lows as growing production and tepid global demand has caused a supply glut and prompted oil producers to scale back spending.

"We expect our headcount adjustments to be in line with our primary competitors," Halliburton's Chief Operating Officer Jeffrey Miller said on a post-earnings call on Tuesday, without giving a specific number.

The company, which employees more than 80,000 people, said it cut 1,000 jobs in its operations in the eastern hemisphere in the fourth quarter.

Baker Hughes, which is being acquired by Halliburton in a near-US$35 billion deal, said earlier in the day it would lay off 7,000 employees.

The job cuts, which come days after industry leader Schlumberger said it would cut 9,000 jobs, underscore the abrupt slowdown in drilling activity seen in the past two months.

The US land rig count has fallen by 250 rigs, or about 15 percent, over the last 60 days, Halliburton Chief Executive Dave Lesar said on the call.
...
http://www.theedgemarkets.com/sg/article...oil-slumps

Thanks CF for the above information.

I would concur that the above information is true as one of my contacts at NOV stated that services related to rig drilling would be pushed to year end, at the very best optimistic.

Oil majors budgets really depends on how prolong this low oil prices will maintain. Cause most output contracts should be negotiated based on prices 6 - 3 months ago. I am very surprised at how quick Petronas comes out to claim a total cut on budget when other oil majors are just keeping mum. Probably its telling their abang and adik to "cut on their own pocket".

[opmi]

Malaysia slashes its budget. Malaysia government is expecting a prolong low oil price, a new normal in oil market. It has voted with US$55 a barrel...

Malaysia slashes 2015 budget, cuts growth forecast

KUALA LUMPUR — Malaysia cut its economic growth forecast for this year and announced austerity measures after tumbling oil prices forced the government to slash its budget.

Prime Minister Najib Razak says the 2015 budget, announced in October last year, was based on oil prices averaging US$100 (S$133.80) a barrel but this projection was no longer realistic as global crude prices have dropped by over 50 per cent.

He says the government lowered its oil price forecast to US$55 a barrel, which will lead to a revenue shortfall of 8.3 billion ringgit (S$3.1 billion). Mr Najib says the government will slash its operating expenditure by 5.5 billion ringgit.

Mr Najib added today (Jan 20) that the economy is forecast to grow between 4.5 and 5.5 per cent this year, down from an earlier estimate of 5-6 per cent. AP
http://www.todayonline.com/world/asia/ma...h-forecast

Msia is an accident waiting to happen. Everything is oil related...Budget, stock market, infrastructure devt, political gravy train, etc...

[CityFarmer]

One more variable into the oil price formula...

Oil jumps after Saudi king's death amid huge market shifts

SINGAPORE - Oil prices jumped in early Asian trading on Friday as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.

Abdullah died early on Friday and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.
...
http://www.todayonline.com/business/oil-...ket-shifts

[sgd]

According to new sources the successor Salman bin Abdulaziz Al Saud himself is old at age 79 and has dementia, the next successor Prince Muqrin and last son of founding king is the best however he is unpopular.

So yes I agree it's a variable and a wild card if the succession does not go smoothly it may create uncertainty affect investors "perceived supply issues" in OPEC's biggest oil producer and anything can still happen whenever new leaders emerge it's certain changes can be expected all leaders have their own ideas and vision, today friend of washington maybe tomorrow friend of russia who really knows?


http://apps.washingtonpost.com/g/page/wo...mily/1059/