South Sudan to begin oil sector audit

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JUBA, South Sudan – South Sudan’s government has directed a full audit into its oil resource management after years of reports of mismanagement of the environment in the oil producing areas.

Caesar Oliha Marko, deputy chairperson for a government oversight committee to oversee implementation of the audit revealed that a U.S.-based firm will audit production and sale of crude since the independence of South Sudan in 2011.

The oversight committee was established in a presidential decree on Feb. 18 this year.

“It is a very serious audit — it is for the first time since 2011,” Marko told reporters in Juba on Monday.

The audit will “ensure the government adopts measures to ensure that loss and wastage of petroleum resources in the course of extraction, processing, transportation and exportation is kept to a bare minimum so that the country derives maximum financial benefits from its exploitation,” Marko said.

Commenting on the humanitarian side of the issue, Marko said, “We have heard about children born with deformities and we are yet to establish real findings to prove it true and if it is true, someone will be held accountable for and that is why someone has to do work to prove it scientific to us.”

“In regard to when the auditing will start, we have already started and that is why we are here we are working out procedures and the real work will start when the audit plan is approved by the government,” Marko said.

The Ministry of Petroleum announced the tender in January of 2020 targeting competent international companies to bid to undertake an environmental audit in the oil producing northern Upper Nile, Unity states and the newly created Ruweng Administrative Area.

By Benjamin Takpiny

Commodity demand growth will go up, due to low-income households and green energy – Goldman Sachs

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Global head of commodities research at Goldman, Jeff Currie, stated his position on the future of the sector this week, citing two big factors why commodities would continue to go up.

One was that while historically stimulus benefited high-income households, current stimulus benefits low-income, who spend a lot more on commodities.

The second factor was the future prospects of oil. Because oil will be less in demand in the future, companies won’t be investing in bringing more oil to the market, even if oil prices rise.

Demand growth for oil, Currie said, would start to slow in 2024-2025 and after 2030 would decline. “What that means, the stimulus effect of all this green spending actually amplifies oil demand,” Curry posited, but, “If we know we have a blueprint for energy transition in the U.S., Europe and China, and the clock is ticking on oil, are you going to invest in long-lived oil production? The answer is ‘no.’ So the only thing you’re going to invest in is short cycle production in the U.S., Middle East and Russia. Everything else is too risky to make investments. The hurdle rate to get investment in this sector is substantially higher than what it was historically.”

Currie saw some potential inflation risk accompanying the demand-pull factors that are driving commodity prices. Commodities prices increases, he said, are in part due to the hedging of bond-holding portfolio managers dealing with inflation possibly creeping up into the 2% range.

By Sid Douglas

Criticism by Bolsonaro triggers $12.6 billion drop in market value for Brazilian multinational Petrobras

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SAO PAULO, Brazil – After replacing the state-controlled oil company’s CEO with a retired general, the Brazilian president blasted its pricing policies and said they should be changed to lower gas and diesel prices, causing a 21% drop Monday in the company’s shares on the São Paulo Stock Exchange.

By Milan Sime Martinić

Russia’s Oil Sector Should Be Privatized in 8 Years – Ex-Finance Minister

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According to Alexei Kutrin, speaking at the SPIEF economic forum this week, “The oil sector should be fully privatized in the next 7-8 years. No state companies are required there now as the statehood brings more harm than benefit to those companies.”

He added that oil companies are able to deal with business issues without assistance from the state.

New Loonie Low

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The loonie might go as low as 70 cents to the U.S. dollar in 2017, according to experts.

Right now it’s around 73 cents, a 14-month low.

The fall of the loonie is tied to the same old things: a strong period for the U.S. economy, interest rate hikes by the U.S. Federal Reserve, and oil prices that are expected to stay low.

However, business in the U.S. isn’t doing amazing: This week, the U.S. PMI was below the forcast level, and construction spending contracted very slightly.

Meanwhile, Canadian manufacturing is doing well. Their PMI reported a 6-year high this week.