Chevron taps out in Anadarko Petroleum battle, will get $1B termination fee

https://www.foxbusiness.com/energy/chevron-taps-out-in-battle-for-anadarko-petroleum

Chevron Opens a New Window. will not provide a counteroffer Opens a New Window. for Anadarko Petroleum Corp., paving the way for Occidental Petroleum to acquire the oil and gas driller after a rare, public fight between the two firms.

Chevron had until Friday to submit a counterproposal for Anadarko after the Texas-based firm earlier this week determined a revised offer from Occidental Opens a New Window. was superior. Chevron announced on Thursday, however, that it will not move forward with a new bid.

"Winning in any environment doesn't mean winning at any cost. Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal," CEO Michael Wirth said in a statement. "We are well positioned to deliver superior value creation for our shareholders."

Under the terms of the initial agreement between Chevron and Anadarko, the San Ramon, California-based company is entitled to a $1 billion termination fee.

Analysts largely applauded Chevron's decision and said the oil giant has no need to pursue a megamerger the size of the Anadarko transaction in the future.

"Chevron simply does not need to expand its upstream asset base through large-scale M&A. There is much to like about the existing assets, and there are plenty of growth opportunities for the future," Raymond James' Pavel Molchanov said in a note.

To win the feud, Occidental sweetened its $38 billion offer to include more cash. The Houston-based firm also got backing from Warren Buffett's Berkshire Hathaway, which said it would make a $10 billion preferred stock investment contingent on the deal closing. Total S.A. also agreed to buy Anadarko's African assets for $8.8 billion in a hasty transaction arranged by Occidental CEO Vicki Hollub.

Given the higher cash included in the offer, Occidental's bid does not require a shareholder vote.

The merger is poised to create an oil and gas powerhouse with extensive operations in the lucrative U.S. shale basin, including the Permian Basin, one that stretches from Texas to New Mexico and is considered the hotbed of shale production in the country.

Occidental will also control Anadarko's assets in the Gulf of Mexico and South America. The firm reportedly pursued the merger over fears that it would be unable to adequately compete in the future against giant Chevron and Exxon Mobil Corp.

Saudi Arabia claims two of its oil tankers attacked near UAE | Capital C...

Saudi oil tankers among those attacked off UAE amid Iran tensions

https://www.yahoo.com/news/saudi-arabia-says-two-saudi-oil-tankers-attacked-065601192--finance.html

By Rania El Gamal and Bozorgmehr Sharafedin

DUBAI/LONDON (Reuters) - Saudi Arabia said on Monday that two of its oil tankers were among those attacked off the coast of the United Arab Emirates and described it as an attempt to undermine the security of crude supplies amid tensions between the United States and Iran.

The UAE said on Sunday that four commercial vessels were sabotaged near Fujairah emirate, one of the world's largest bunkering hubs lying just outside the Strait of Hormuz. It did not describe the nature of the attack or say who was behind it.

The UAE on Monday identified the vessels as two crude oil tankers owned by Saudi shipping firm Bahri, a UAE-flagged fuel bunker barge and a Norwegian-registered oil products tanker. 

The owner of the Norwegian vessel, Thome Ship Management, said the vessel was "struck by an unknown object". Footage seen by Reuters showed a hole in the hull at the waterline with the metal torn open inwards.

A Reuters witness said divers were inspecting the ships. The UAE's state news agency said Fujairah port was operating normally.

Iran, embroiled in an escalating war of words with the United States over sanctions and the U.S. military presence in the region, moved to distance itself on Monday.

Iran's Foreign Ministry called the incidents "worrisome and dreadful" and called for an investigation.

A senior Iranian lawmaker said "saboteurs from a third country" could be behind it, after saying on Sunday the incident showed the security of Gulf states was fragile.

A U.S. official familiar with American intelligence said Iran was a leading candidate for having carried out the attacks but the United States does not have conclusive proof.

"It fits their M.O. (modus operandi)," said the official on condition of anonymity, suggesting Iran's statements distancing itself from the incident were an attempt "to muddy the waters."

POMPEO WARNS OF ESCALATING THREATS 

U.S. Secretary of State Mike Pompeo shared information on "escalating" threats from Iran during meetings with EU counterparts and the head of NATO in Brussels, the U.S. special representative for Iran Brian Hook told reporters.

Hook declined to say whether he believed Iran played a role or if Pompeo blamed Iran. He said the UAE had sought U.S. help in the investigation and Washington was glad to provide this. 

The U.S. Maritime Administration said in an advisory on Sunday that incidents off Fujairah, one of the seven emirates that make up the UAE, had not been confirmed and urged caution.

Last week the Maritime Administration said Iran could target U.S. commercial ships including oil tankers sailing through Middle East waterways.

Iranian Foreign Ministry spokesman Abbas Mousavi said the UAE incident "has a negative impact on maritime transportation security" and asked regional countries to be "vigilant against destabilizing plots of foreign agents", the semi-official ISNA news agency reported.

Before talks with Pompeo in Brussels, Britain's Foreign Minister Jeremy Hunt warned of the risks of "a conflict happening by accident" with an unintended escalation between Washington and Tehran over an unraveling nuclear deal.

GRAPHIC-Oil tankers attacked - https://tmsnrt.rs/2W4yczs

CHOKEPOINT

Washington withdrew last year from a 2015 pact between Iran and global powers aimed at reining in Tehran's nuclear plans. Since then, Washington has ratcheted up sanctions on Tehran, saying it wanted to reduce Iranian oil exports to zero. 

U.S. President Donald Trump wants to force Tehran to agree a broader arms control accord and has sent an aircraft carrier and B-52 bombers to the Gulf in a show of force against what U.S. officials have said are threats to U.S. troops in the region.

Trump on Monday said Iran would "suffer greatly" if it targeted U.S. interests. 

Tehran has called the U.S. military presence "a target" rather than a threat and has said it will not allow its oil exports to be halted.

A fifth of global oil consumption passes through the Strait of Hormuz from Middle East crude producers to major markets in Asia, Europe, North America and beyond. The narrow waterway separates Iran from the Arabian Peninsula.

Iran's Revolutionary Guards, designated a terrorist organization by Washington, threatened last month to close the chokepoint if Tehran was barred from using it.

Oil prices rose more than $1 a barrel on Monday but then fell with Wall Street as the negative turn in U.S.-Chinese trade talks spooked investors. Brent futures closed down 39 cents at $70.23 a barrel.

Saudi Energy Minister Khalid al-Falih said one of the two Saudi vessels was attacked in the UAE economic zone on its way to be loaded with Saudi crude from Ras Tanura port for delivery to state-owned Aramco's customers in the United States. 

No oil was spilled but the attack did significant damage to the vessels' structures, he said. 

Dubai and Abu Dhabi stock markets suffered their biggest single-day declines in years on Monday, with Dubai falling 4%. Saudi shares lost 3.6%.

Sunni Muslim allies Saudi Arabia and the UAE have backed U.S. sanctions against Shi'ite Iran, a fellow OPEC producer but regional foe. After the United States ended sanctions waivers that had allowed some nations to continue importing Iranian crude, Washington said Riyadh and Abu Dhabi would help compensate for any oil shortage.

Falih said the attack aimed to undermine maritime freedom and the security of oil supplies. 

"The international community has a joint responsibility to protect the safety of maritime navigation and the security of oil tankers, to mitigate against the adverse consequences of such incidents on energy markets and the danger they pose to the global economy," he said.

(Reporting by Rania El Gamal and Bozorgmehr Sharafedin; Additional reporting by Jonathan Saul and Robin Emmott in London; David Brunnstrom, Idrees Ali and Mark Hosenball in Washington; Saeed Azhar in Dubai and Oslo newsroom; Writing by Ghaida Ghantous; Editing by Edmund Blair, Mark Potter and Lisa Shumaker)

Venezuelans Are In A Power Struggle — For Their Own U.S. Embassy (HBO)

VLCC markets surplus impacts rate levels

http://www.tankeroperator.com/ViewNews.aspx?NewsID=10768

Another lacklustre week in the VLCC market, as ships piled up in Fujairah and Galle. 

 

Owners are currently facing returns well below OPEX for most cargo combinations, with rates trading in the high W30s from both MEG and West Africa/eastbound for modern ships and at a 2.5-5 point discount for older units, Fearnleys reported.

Suezmaxes experienced a slow start after the holiday period as charterers took advantage of the steady accumulation of tonnage. Rates softened accordingly.

However, owners resistance started to build in West Africa with some preferring to sit and wait for the right voyages. This has had a knock on effect with WS80 having been paid for West Africa/East - up a handful of points but purely sentiment driven.

Elsewhere, the Med and Black sea seen low fixing volume with TD6 steady at WS 80. Not too much is expected to change for the balance of this week.

As for Aframaxes, those trading in the North Sea and Baltic saw healthy activity levels this week, as owners continuously pushed to keep this positive momentum going.

With TD7 currently trading around WS115 levels, we expect a firm sentiment in the natural fixing window in the North.

Owners are finally seeing alternatives in other markets, which have picked up, such as the Mediterranean and Black Sea, where a firm upward trend in freight levels was seen.

Returns for a TD19 voyage have picked up over the week, from around $1,000 per day at the middle of last week to $12,000 per day at time of writing (Wednesday). TD19 currently stands at WS100.

Fresh cargoes have been coming into the market keeping activity levels firm. At present, owners are finding this an attractive market and we are expecting them to maintain their stand in the week to come in order to ensure a further uptick in freight rates, Fearnleys concluded.

Brokers reported that the 2019-built VLCC ‘Landbridge Glory’ has been fixed to Trafigura for three years at $36,500 per day, including options.

Trafigura also reportedly took the Aframax ‘Sea Panther’ for six months at $22,500 per day.

In the MR segment, ST Shipping was said to have fixed the 2007-built ‘Vinalines Galaxy’ for six months at $12,400, while Trafigura was believed to have taken the 2009-built MR ‘Pyxis Malou’ for six to eight months trading at $14,000 per day.

In the S&P sector, brokers reported that NGM Shipping has sold the 2003-built  VLCC ‘Vida’ to undisclosed buyers for $26 mill. She was sold to NGM Shipping as ‘DS Vida’ last October for $22.8 mill.

Navios Maritime has sold two LR1s and three MRs to Avic Leasing for $103.2 mill en bloc.

The newbuilding scrubber fitted Suezmax ‘Nordic Glaze’ was reportedly sold to Frontline for $66 mill. She is due for delivery next year. 

A few more newbuildings came to light, including two, option two Aframaxes at Daehan for Minerva for a reported $50 mill each. They are due for delivery in 2021.

Chartworld was also thought to have booked two, option two Aframaxes at New Times for $46.5 mill each, also for 2021 deliveries.

On the back of a long term Shell charter, EShips was said to have ordered six IMO II MRs at Hyundai Mipo for $38 mill. They are due for delivery in 2020/2021. 

Meiji was said to firmed up options for another two scrubber fitted MRs at HMD for $38 mill each.

US Lifts Sanctions on Venezuelan General Who Renounced Maduro

Anadarko Says It Now Favors Occidental Bid Over Chevron

Whichever suitor emerges victorious, the sale of Anadarko will be the largest deal in the global oil industry in three years.CreditCreditLoren Elliott/Reuters

https://www.nytimes.com/2019/05/06/business/energy-environment/anadarko-occidental-chevron.html

HOUSTON — In an escalating bidding war, Anadarko Petroleum said on Monday that it intended to reject its first suitor in a takeover bid, Chevron, after Occidental Petroleum came forward with a better offer.

The announcement by Anadarko’s board, a day after Occidental sweetened its bid with more cash, is far from a final decision. Chevron will now have four days to improve its offer, after which Occidental would have several days to revise its bid.

Bidding wars for big oil companies have been rare in recent years, and the Occidental-Chevron standoff has already seized the investment world’s attention. Occidental’s chief executive, Vicki Hollub, has emerged as one of the nation’s most prominent oil executives by challenging Chevron, a giant four times the size of her company.

“Known for her love of Alabama football, Oxy C.E.O. Vicki Hollub is ripping up the playbook and running an all-out offense on the Anadarko board,” Paul Sankey, an oil and gas analyst with Mizuho Financial Group, wrote in a research note to clients on Monday morning.

Whichever suitor emerges victorious, the sale of Anadarko will be the largest deal in the global oil industry in three years and establish a dominant producer in the Permian Basin of Texas and New Mexico, the most productive oil field in the world.

In a statement on Monday evening, Anadarko said it “intends to terminate the Chevron merger agreement in order to enter into a definitive merger agreement with Occidental in connection with the revised Occidental proposal.”

Occidental has made four offers for Anadarko in the last two years, but the bidding war began in earnest two weeks ago when Occidental proposed a $38 billion takeover, several billion dollars more than Chevron’s bid. A spokesman for Chevron said on Monday that the company had no comment on Anadarko’s decision.

Over the last week, Occidental won a $10 billion investment from Warren E. Buffett’s Berkshire Hathaway to help finance the acquisition. Then on Sunday, Occidental said it had lined up a sale of Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa to Total, the French oil company, for $8.8 billion.

In a twist on Sunday night, Occidental raised the cash portion of its proposed acquisition of Anadarko to 78 percent, from 50 percent, further increasing the pressure on Anadarko and Chevron. Anadarko’s board said it still preferred a deal with Chevron but kept the door open to further negotiations.

The takeover battle has made meaningful waves beyond the three oil companies directly involved. If Occidental wins, Total stands to become a dominant producer of liquefied natural gas in Africa. Mr. Buffett is making a big bet on oil just a few years after Berkshire Hathaway sold its shares in Exxon Mobil.

The primary prize in the bidding war is Anadarko’s 600,000 acres of shale-oil holdings in the Permian Basin. Industry experts say those parcels are among the most lucrative in the United States. The company has identified 10,000 drilling locations, which is near the operations of Chevron and Occidental.

The Permian produces four million barrels of oil a day, slightly more than the Ghawar field in Saudi Arabia, previously the most productive in the world. The basin accounts for one-third of American oil supplies and exceeds the output of every member of the Organization of the Petroleum Exporting Countries except Saudi Arabia and Iraq.

The takeover of Anadarko would add to the concentration of Permian assets in the hands of the biggest oil companies. Chevron, Exxon Mobil, Royal Dutch Shell and BP have all made big purchases in the basin over the last four years.

Some Wall Street analysts say the increased cash in Occidental’s offer made a big difference, in part because the company’s shareholders would no longer have to approve the deal since it is offering less than 20 percent of its shares. T. Rowe Price Group, a major holder of Occidental shares, had earlier indicated that it opposed the deal because it would weaken the company’s balance sheet.

But other analysts remain skeptical that Occidental can beat Chevron, which has much deeper pockets and could more easily integrate Anadarko’s natural-gas operation in Mozambique and its large offshore rigs in the Gulf of Mexico. Also, Anadarko would be obliged to pay a $1 billion breakup fee under the terms of its deal with Chevron.

“We do not believe Chevron would have to fully match Oxy to get this deal across the finish line,” analysts at Morgan Stanley said in a research note on Monday.

Occidental on Monday night welcomed Anadarko’s decision. In a statement, it said, “We have long been convinced that a strategic combination with Anadarko represents a compelling opportunity for shareholders of both Occidental and Anadarko.”

T. Rowe Price, Occidental’s sixth largest shareholder, reacted strongly against the deal on Monday by saying it would vote against the company’s board of directors at its annual meeting on Friday. The firm, which also holds shares in Anadarko and Chevron, said such a complex deal should have first earned the support of investors.

Ms. Hollub said raising the cash component of her offer was not intended to avoid a shareholder vote, only to be more competitive with Chevron.

A version of this article appears in print on May 7, 2019, on Page B1 of the New York edition with the headline: Anadarko Shifts Its Favor As Occidental Sweetens Bid. Order Reprints | Today’s Paper | Subscribe