In order to keep up with the frenetic growth of global shipping traffic—which has quadrupled over the past two decades alone—commercial cargo ships keep getting bigger. And the newest king of the containerships isn't one of Maersk's EEE titans, it's the CSCL Globe.
The existing cargo ship record holder, in terms of capacity, is the MV Maersk Maersk. It holds a whopping 18,000 TEU (twenty-foot equivalent unit) shipping containers and beat out the older, 16,020 TEU MV CMA CMG cargo ship for the title in 2013. The new CSCL Globe from Hyundai Heavy Industries, however, will eek out an additional 1,000 TEUs—19,000 TEU in all—once it's delivered to its new owner, China Shipping Container Lines (CSCL), in the coming weeks.
The CSCL Globe is the first of an upcoming fleet of four such $175 million vessels that the company plans to operate throughout the Pacific. The Globe measures more than 1,300 feet long, almost 200 feet wide, 98 feet deep, and weighs 183,800 tons. It's powered by a single 94,791 hp MAN B&W 12-cylinder diesel engine. That's not quite as powerful as the RTA96-C, but the Globe's engine incorporates an electronically-controlled throttle that takes the ship's relative speed and the prevailing ocean conditions into account to offer increased fuel efficiency rates. In fact, the Globe's engine burns 20 percent less fuel per TEU than a cargo ship roughly half its size, even when travelling at its 16 knot top speed.
The Globe's three sister ships should be delivered by 2015, though with the rate at which even larger ships are being designed—there's already talk of 25,000 TEU behemoths—they probably won't be holding onto the title of "world's largest cargo ship" for very long.
The Democrat-controlled Senate has defeated a bill to approve the Keystone XL oil pipeline.
The Senate's 59-41 vote Tuesday night was a nail-biter to the end.
The bill needed 60 votes to reach the White House. The House passed it overwhelmingly last week.
President Barack Obama did not support the bill, but the White House has been mum on whether or not he will veto it.
Democrat Sen. Mary Landrieu pushed for the vote in an effort to save her seat in a Dec. 6 runoff election in Louisiana. She faces an uphill battle against Republican Rep. Bill Cassidy, who authored the House bill.
All Republicans said publicly they supported the Senate bill, as did several moderate Democrats.
Last Friday, the price of Brent crude, seen as a benchmark for what India uses, saw a low of $75.3 a barrel - it is now trading around $79
Crude oil’s long price slide might be ending, feel some experts. Last Friday, the price of Brent crude, seen as a benchmark for what India uses, saw a low of $75.3 a barrel — it is now trading around $79. The fall has been nearly a third from its high seen in June, only five months earlier.
However, feels T Gnanasekar, Director, CommTrendz: “The technical picture suggests Brent crude has found a bottom. Though Friday’s rebound was mostly a short-covering and profit-booking one, there are chances that prices might have bottomed out for the time being.”
Still, to sustain above technical levels, a commodity requires some demand or a fundamental support. Gnanasekar believes, “Winter demand will set in soon and that might support prices.”
Another factor could be a cut in production by the Organization of the Petroleum Exporting Countries (Opec), which a meeting on November 27. Earlier, Opec used to say $100 was the safe price below which it would not intervene. The price is well below this, partly because its stronger members were talking down the prospect of a cut in output quotas.
However, Natixis Commodities says: “What is rapidly becoming evident is the extent of the potential damage that lower oil prices might wreak upon weaker Opec members.” For instance, Nigeria’s 2014 budget is predicted upon output of 2.39 million barrels a day at a price of $77.50/bbl. Its output is running below the target and now if the price also remains lower, its budget calculations will unravel. Venezuela is repaying its international debt, especially to China, also in the form of crude oil. A lower price affects its debt repayment. And, half of Ecuador’s exports are of crude oil; a fall in its prices beyond a point would substantially hurt its economy.
Also, at some point, a lower price will affect new projects. So far, no report has come of the dropping new and big exploration. BP and Total, major entities in this field, have both indicated they will proceed with existing projects even at $80/bbl. BP’s chief executive, Bob Dudley, was quoted last week as saying lower prices would impose more discipline on the oil industry.
The International Energy Agency feels a price of $80/bbl would result in a 10 per cent fall in US oil investment in 2015.
Opec secretary-general Abdalla Salem el-Badri is trying to find a balance. He has said, “Opec is looking for a reasonable price, at which producers and consumers can live together.
ACCRA/LONDON, Nov 14 (Reuters) - Ghana National Petroleum Corporation (GNPC) is in talks with commodities trader Trafigura and banks for a $700 million five-year loan at 4.43 percent to fund oil and gas projects, GNPC and a source close to the deal said on Friday.
The deal would be Trafigura's first in Ghana and GNPC said it would be funded through its mandated share of national oil export revenue rather than using oil as collateral.
GNPC is a key player in a country where oil exports are the second biggest source of revenue and it is seeking $1 billion to become an independent operator.
GNPC cannot fund itself entirely through public sources and the loan would save money in the long term, GNPC said in a document prepared for the deal and seen by Reuters.
"GNPC has to be prudent and build up capital for its growth. This is normal commercial practice. No serious company lives from year to year," it said. It did not name the banks involved.
GNPC is in talks with Offshore Cape Three Points (OCTP) partners for a $493 million gas pipeline and receiving facility and would pay 22 percent interest were it not for the new loan.
Ghana is on course to produce around 105,000 barrels of oil per day in 2014 from its offshore Jubilee field, GNPC said. It expects $15-$20 billion in oil investment over the next decade.
Britain's Tullow Oil is the lead stakeholder in Jubilee while GNPC holds a 13.6 percent stake.
GNPC said it would not go to parliament for approval but politicians from the ruling party and the main opposition told Reuters any loan needed scrutiny in part because it exceeded the government's annual allocation to GNPC.
"We have given them the money for the year so if they are asking for $700 million they need to come and explain to us the need for this huge further expenditure," said Kobina Hammond, energy spokesman for the opposition New Patriotic Party.
Ghana discovered oil in 2007 and many groups scrutinise its financing out of concern that oil money could corrupt officials and distort the economy it has done in other countries.
The announcement comes at a sensitive time ahead of the annual budget and during talks with the International Monetary Fund for financial assistance to restore fiscal balance in a economy that has seen rapid growth on its commodity exports.
Any loan without parliamentary approval would overstep constitutional and legal due process, said the influential African Centre for Energy Policy, which called for a suspension of the loan. (Additional reporting and writing by Matthew Mpoke Bigg; Editing by David Evans)
(Reuters) - Halliburton Co (HAL.N) will buy Baker Hughes Inc (BHI.N) for about $35 billion (22 billion pounds) in cash and stock, creating an oilfield services behemoth to take on market leader Schlumberger (SLB.N) as customers begin to cut spending due to falling oil prices.
Halliburton expressed confidence that the deal would clear regulatory hurdles, but Baker Hughes shares were trading well below the offer, suggesting that investors were not so sure.
Halliburton also said it was ready to divest businesses that generate revenue of $7.5 billion to satisfy regulators and would pay Baker Hughes $3.5 billion if the deal was not cleared.
"At the end of the day, we wouldn't have done this deal if we didn't believe it was achievable from a regulatory standpoint," Halliburton Chief Executive Dave Lesar said on a conference call.
The deal, the second biggest in the U.S. energy sector this year, would create a company that dominates the North American market for hydraulic fracturing.
While there are at least seven major services where there is an overlap between the two companies, the deal would fill gaps in two product lines in Halliburton's portfolio – product chemicals and pumps that boost output from oil and gas wells.
Baker Hughes shares were trading at $65.40 just after the opening on Monday, well short of Halliburton's offer of $80.69, which was based on Friday's close.
Halliburton shares were down 8.5 percent at $50.34. Schlumberger was up 0.3 percent at $95.60.
Talks between the two companies started over a month ago and came to a head on Friday when Halliburton threatened to replace Baker Hughes's board after its initial offer was rejected.
Baker Hughes shareholders will get 1.12 Halliburton shares plus $19 in cash for every share held, and own 36 percent of the combined company.
Baker Hughes will get three seats on the combined company's 15-member board.
The combined company's 2013 revenue was $51.8 billion on a pro-forma basis, more than Schlumberger's $45.3 billion.
Credit Suisse and BofA Merrill Lynch advised Halliburton and Goldman, Sachs & Co advised Baker Hughes.
Law firms Baker Botts LLP and Wachtell, Lipton, Rosen & Katz worked with Halliburton, while Davis Polk & Wardwell LLP and Wilmer Cutler Pickering Hale and Dorr LLP advised Baker Hughes.
(Additional reporting by Kanika Sikka in Bangalore; Editing by Savio D'Souza)
Crude futures prices may continue to free fall even with the 30% drop since June. The price of West Texas Intermediate for December is now hovering at the $76 a barrel level, just shy of the $75 target the team at Goldman Sachs (GS) is forecasting for 2015. While Brent for December is at $79 a barrel, the lowest since 2010 and below Goldman’s $85 a barrel target.
These prices may look good to some speculators, however Jonathan Hoenig of CapitalistPig.com says forget about it. “Why go long assets in a bear market? It’s a bad move, it's a low probability bet in my book.”
Hoeing predicts the bear market in crude will continue with prices potentially falling as low as $50 a barrel, in part because the global economy is slowing, pushing supply levels higher.
This week the U.S. Energy Information Administration (EIA) confirmed what the market is telling us by cutting its 2015 forecast for Brent crude to $83 a barrel. In a report, the EIA said, “There is significant uncertainty over the crude oil price forecast because of the range of potential supply responses from the Organization of the Petroleum Exporting Countries (OPEC), particularly Saudi Arabia, and U.S. tight oil producers to the new lower oil price environment.” OPEC is set to meet on November 27th in Vienna, Austria.
The other half of the energy story and also a big influence on prices, says Hoenig, is the advancement in the U.S. energy industry, and the production of great oil companies particularly in the United States. "We like to rail against fossil fuel companies, but it is their advancements in oil extraction and fracking that have brought oil and natural prices to historic lows.”
The EIA expects Henry Hub natural gas spot price to average $3.97/million British thermal units this winter, lower than the $4.53/M BTUs last winter. The United States Natural Gas ETF (UNG), which closely tracks the natural gas market, has advanced 22% over the past 12 months.
Fracking has transformed the state and attracted thousands of workers, including African immigrants
Ibrahim Kamara, left, and Younger Konah outside their trailer in Williston, North Dakota, Sept. 26, 2014.
Les Stone for Al Jazeera America
WILLISTON, N.D. — The sun wasn’t yet visible over the nearby farmhouse when Younger Konah and Ibrahim Kamara stepped out of their battered trailer. The matching black T-shirts they wore read, “100% All-American premium deliciousness.”
Decaying heavy machinery lay scattered around the field near the couple’s home: a bulldozer, pickups, a boat, a howitzer cannon, even an amphibious military transport vehicle. Several nearby trailers also housed migrant workers. Konah, 23, and Kamara, 26, each of whom escaped a West African war before arriving in this country as refugees, call this informal settlement “the camp.”
On their way to work at Fuddruckers, the hamburger chain, Konah was excited to meet the puppy a co-worker had offered her from a new litter. “I want something that will be mine, something I will train my way,” she said.
Konah and Kamara are two of the African-born workers who have come to this town in northwest North Dakota, a remote part of a remote state, to capitalize on the oil boom that has transformed the landscape and local economy. Between 2009 and 2013, the number of workers and those seeking employment in the county has more than tripled, from 15,000 to nearly 50,000.
Konah outside the trailer that she and Kamara rent. Les Stone for Al Jazeera America
No one tracks how many are African. But their stories recall American traditions of immigration and fortune seeking, recast for a time when all that matters is finding well-paid work.
Thanks to the Bakken, a formation of oil-saturated shale rock that lies under parts of North Dakota, Montana and Canada’s Saskatchewan province, the United States has surpassed Saudi Arabia as the top oil-producing nation. Geologists have long known about the oil, but it’s only since recent developments in hydraulic fracturing or “fracking” technology, a process of breaking the rock with pressurized water, that it could be profitably exploited. North Dakota is now the second-largest oil-producing state, after Texas, and saw its production almost triple from 2010 to 2013.
Williston functions more like a giant open-air factory than a small town. Pickup trucks and 18-wheelers swarm the streets at all hours. In fields on the town’s outskirts, natural gas flares burn next to the nodding pumpjacks. Retired general and CIA director David Petraeus, who visited earlier this year, said Williston resembles a “war zone.”
Due to skyrocketing demand, housing costs in Williston can approach big city rates; one-bedrooms often rent for $1,200 a month. Hotels and restaurants compete for business from a transient, overwhelmingly male population of oil workers. To keep workers here, service-industry jobs tend to pay far higher than they do elsewhere. A sign in front of the Walmart — which serves as both the industry canteen and the closest thing Williston has to a public square — recently advertised a starting wage of $17 an hour.
Before the boom, Williston was “in no way diverse,” according to Debbie Slais, director of the local library. But, she said, there are now native Spanish speakers and a Turkish community as well as immigrants from numerous African countries.
“No matter your situation, you find a job” in Williston, Kamara said. “It might not be the job you looking for, but you find a job you can survive on.”
The flare from a fracking rig outside Williston.
Les Stone for Al Jazeera America
Ibrahim Kamara grew up in Freetown, the capital of Sierra Leone. His father was a soldier, and his mother was a social worker and community organizer before they both died in the country’s civil war, which ended in 2002. He fled with his grandparents and sister to nearby Guinea before relocating to Fargo, North Dakota, in 2003. “It was like we’d been saved from Earth to heaven,” he said.
Kamara, who has a bushy goatee and a gap between his front teeth, attended middle and high school and North Dakota State University in Fargo, but he began getting in trouble and dropped out. “We’re used to the hard life over there [in Africa], where when things happen between two men they fight it out,” he said. He received a shoplifting misdemeanor conviction and an aggravated-assault charge that was dropped to a misdemeanor, he said. As a result, he was at risk of being deported.
About two-and-a-half years ago, he met Konah, who had left Liberia during its civil war. Konah has high cheekbones, a few faded tattoos and, like Kamara, speaks with a thick accent. She said she lived in the suburbs of Washington, D.C., and in Minnesota and Boston, before moving to Fargo. There, she worked as a cleaner, while Kamara worked as a cook at a TGI Fridays. Wages were low, about $8 an hour, and they heard about better opportunities in the oil fields. “We decided we had to move here to build a better future if we were going to be together,” Konah said.
“We came here with zero dollars,” Kamara said. “The only thing we had was gas in our car.”
After arriving in April 2013, they began visiting a temp company that arranged day work in exchange for a portion of their wages. They showed up at 6 a.m. to see if they would work that day. Kamara found jobs in construction and maintenance, while Konah cleaned and “flagged” — directed traffic around construction sites. On days when only Kamara worked, Konah sometimes spent her time in the car waiting for him.
But Kamara’s heart was in the kitchen. “I love meat,” he said. “I love cooking steaks.” He filled out an application at Doc Holliday’s Roadhouse, a new restaurant. When it opened, he got the job.
The owner then offered him additional work at another place, a brew pub that opened a few months later. Kamara said he has worked at five restaurants since moving to Williston; all of them opened in the last 18 months.
Kamara and Konah have come to Williston in search of a path to a better life.
Les Stone for Al Jazeera America
For their first three months in Williston, Kamara and Konah usually slept in their green Chevy Impala. Finding a place for the night could be a challenge. Walmart called the police on them, Kamara said, and locals sometimes “got scared if they see somebody sleeping outside their house.” (Walmart confirmed that its store doesn’t permit migrant workers to sleep in the parking lot.) The library allowed cars to park overnight, but there wasn’t always room for everyone. The couple first heard about the camp when a friend from Fargo suggested sleeping there.
Soon, they moved into the trailer, where they pay $600 a month for a cramped space that lacks running water or sewage. The land and trailers are owned by a Vietnam War-era veteran who has won local notoriety for his impersonations of World War II Gen. George Patton. He declined to give his name. Williston residents cannot legally turn their property into unlicensed campgrounds.
A bed with a leopard-print blanket filled one end of the trailer. There was room for a stove, a couch and a large flat-screen television. DVDs and a set of poker chips were spilled across the tiny kitchen table. Pallets of bottled water were stacked on one of the seats. At the far end of the trailer, there was a bunk bed made and ready for others who want to come to Williston and try their luck.
The pair paid to shower at a nearby truck stop and stored their food in pickle barrels to keep out the rats. In late September, the area experienced record temperatures above 90 degrees. Inside the trailer, it felt even hotter. In winter, the temperature can drop to negative 40. Konah and Kamara own a heater and have endured one winter so far.
The couple would like to move to an apartment eventually, but they worry about not having a credit history. They’ve paid application fees for apartments, Kamara said, only to be rejected. “We’re stuck here taking it a day at a time.”
Relaxing in an easy chair one afternoon, as a black-and-white Western played on television, the landlord estimated that there were 10 tenants living on his property. (A reporter met at least nine, seven of whom were born in Africa.) “I don’t know where they’d go if they got kicked out of here,” he said. “It’d be a sad thing for them.” In addition to his unlawful tenants, the landlord said, he was collecting royalties from seven oil wells on his land. “I’m surviving,” he said.
Kamara and Konah were too. Together, they earned more than $30 an hour, enough to save money and send some back to family in Africa. “You don’t have to have a lot to change someone else’s life,” Kamara said. “Americans didn’t have all their problems solved when they was helping me to come here for a better life.”
Kamara said his main contact in Sierra Leone had been his uncle, a hospital worker who recently died of Ebola. In September, the epidemic was much on their minds. “It’s the type of disease that can wipe out a generation,” Konah said.
The couple has managed to earn enough money at their jobs at Fuddruckers restaurant to send some back to relatives in Africa.
Les Stone for Al Jazeera America
It’s not work at Fuddruckers that draws most people to Williston. The oil industry is constantly hiring for well-paying jobs, which rarely require more than a high-school education. Truck drivers who haul equipment and frack water can reportedly make more than $80,000. Experienced oil-field workers earn considerably more.
Abdulateef Omar, 28, a truck driver who also lives in the camp, said he fled Sudan for West Africa. After spending time in a refugee camp in Ghana, he relocated to South Dakota. He had worked in hospital food service and studied at a technical college, but he said, the oil industry paid better.
Christopher Obey, a trucker from Liberia who had just arrived in the camp via Minnesota, found work within a day. His job had taken him to 25 states so far. “I just like to go around and make some money.”
For Kamara, a job in the oil fields was more elusive. He once applied to be a roustabout, a low-ranking laborer in the industry, but was rejected, he said. “They said I wasn’t qualified.”
That experience may be common for Africans here, according to Guleed Farah. The tall Somali-born man decided to take time off from his studies at the New Mexico Institute of Mining and Technology to work as a lab technician for a major oil-services firm. “The majority of them can’t get their leg in,” often, he believes, because of racism. “You can’t do anything about it. You have to live with it.” Farah hasn’t been so hampered; he showed off a letter from a large oil company offering him starting pay of about $8,000 a month.
Farah said employers are also wary of Africans’ imperfect English. Oil rigs are “very fast moving environments,” he said, and accidents are “due to miscommunication most of the time.”
Guleed Farah from Somalia is training to be a chemical engineer.
Les Stone for Al Jazeera America
Williston’s highly transient population — oil workers often come to town for shifts measured in weeks before going home — is not conducive to civic life. “Everybody is basically doing what they gotta do to survive, which means that everybody working,” Kamara said. Even in the camp, he said, “We don’t have a time when we all get together and sit down, talk about life.”
Religious services provide a rare opportunity to commune. Kamara and Konah like to go to a Lutheran church when their shifts allow it. And a group of Muslims rents out a room at the library for Friday prayers. The gatherings have been going on for several months, said Slais, the librarian, since one of the men’s wives came in for story hour with a child and asked if they had space available.
Before prayers, the muezzin, a Senegalese man in a floor-length caftan who works as a janitor at Walmart, laid mats over the gray carpet. “It’s a blessed city,” the imam, a Ghanaian man who washes trucks, said. As he led the service, about 50 worshippers trickled in.
Ngergal Ndiaye from Senegal prepares for Friday Prayer in the Library in Williston.
Les Stone for Al Jazeera America
Worshippers at Friday prayers at the library.
Les Stone for Al Jazeera America
Kamara said he and Konah would like to stay in Williston for three years and then leave to start a business, perhaps an import/export company that trades with their native countries. If that works out, he said, the remittances they’re sending now are helping to maintain what could become business relationships.
On a sunny September afternoon, that future seemed far away. Konah played with her new puppy, small, black and adorable, perhaps a mix of pit bull and labrador. She named it Tiger. A doggie bed had been newly installed under the trailer’s postcard of a table.
Kamara sat outside, shirtless and wearing a skullcap; he dug into a dish Konah had prepared of rice, potato leaves, spinach, palm oil and meat, flavored with habanero peppers.
Konah offered a handful to Tiger. The dog was reluctant at first but eventually sampled the fiery mix, repeatedly licking her lips in what looked like agitation. “Your first African food,” Konah said, pouring Tiger a bowl of water. “She’ll get used to it.”
