© REUTERS / Thomas PeterПредседатель of China XI Jinping and U.S. President Donald trump before the gala dinner in Beijing. 9 November 2017
© REUTERS / Thomas Peter
The American kancevica in a desperate situation: the collapse of oil prices, huge debts and lack of investment turned into a string of bankruptcies. But the worst may be ahead in depreciating assets in the energy sector are eyeing the Chinese company. Washington has said it is a clear threat to national security. Why Chinese manufacturers of the problematic — in the material RIA Novosti.
the Wave of bankruptcies
From the beginning of the pandemic, oil prices dropped by almost 50% in April due to the unprecedented contraction in demand for fuel oil storage tanks and crowded futures fell into negative territory.
As a result, hundreds of American oil and gas companies on the verge of bankruptcy. So, Parsley Energy closed 150 wells Continental Resources have cut production by a third, Texland Petroleum completely.
In April went bankrupt one of the largest Kantemirov — Whiting Petroleum, followed by the services company Hornbeck Offshore Services. In may about a possible termination of activity of the investors reported California California Resources and shale giant Chesapeake energy.
Analysts warned: this is only the beginning of a wave of bankruptcies, which soon will cover the industry. According to the forecast Pickering Energy Partners, ruin this year threatens almost 40% of shale companies.
«Pandemic coronavirus ruined the oil industry, triggering a rapid and unprecedented decline in demand for gasoline, jet and diesel fuel. Add to this the «an epic price war» between Russia and Saudi Arabia, and huge debts on the balance sheets of American oil companies. These factors will almost certainly cause a surge of bankruptcies in the coming months. Unlike the oil crisis in the 2014-2016 period, many companies will not survive» — predict analysts at Bloomberg Intelligence.
According to a study by the Federal reserve Bank (FRB) of Dallas, even in relatively «cheap» shale Permian basin in West Texas to profitability needs oil to average $ 49 per barrel. As predicted by the FRB, at 40 dollars during the year will survive only 15% of manufacturers.
In this situation, the us kancevica will become an easy and attractive prey for «hunters m & a». The main threat comes from China — restrictions were removed, the economy revives and there is interest in depreciating foreign assets.
In Washington fear the seizure of China destroyed the energy sector. "the Prospect of a hostile acquisition of the troubled shale companies in Texas not only is a serious problem for national security," said Texas oil regulators.
The threat is real — the American energy assets much cheaper. Thus, the average price of oil has decreased by half compared to the times when a barrel cost $ 60, from 42 thousand to 20 thousand dollars.
"American shale companies — an obvious target for the Chinese due to the unprecedented destruction of demand, low energy prices and the catastrophic debt," — specifies authoritative research resource OilPrice.
Coronavirus crisis has not bypassed the Chinese company, but did not weaken the appetite of Beijing to the acquisitions of attractive assets. An example of this is the recent attempt to purchase state China Reform the UK's largest manufacturer of chips for smartphones, Imagination. The deal fell through only after the intervention of the British authorities.
A direct takeover of the American oil and gas companies by the Chinese is unlikely — it will cause the attention of the government. But a possible work-arounds: for example, the acquisition of non-strategic assets or the creation of joint ventures.
So, in 2015, the Chinese firm Yantai Xinchao Industry Co. received permission of the Committee on foreign investment U.S. (CFIUS) to buy oil assets for $ 1.3 billion through the American company Tall City Exploration and Plymouth Petroleum in the Permian basin.
The observers note: special alternatives for kancevica not visible. Over the next four years to return the Bank $ 86 billion dollars, and pay nothing.
Now the revenue from the sale of quarters produced in the US shale oil entirely goes to interest on corporate borrowing. Total debt industry exceeded $ 300 billion, and its maturity have nine billion barrels of raw materials. It's almost as much as kancevica extracted from the subsoil in its history (about ten billion barrels).
With a financing a disaster. For investors, the shale companies were "black sheep", said FactSet, the international research firm. Since 2007, the stock index American kancevica lost 31%, while the S&P 500 gained 80%. During this period, manufacturers spent 280 billion dollars more than it earned on the sale of oil and gas.
To save kancevica unless the increase in oil prices. Over the past three weeks, WTI tightened to 33 dollars per barrel. But this is not enough: given the rigid cost structure of the shale business for profitability, you need at least 50.
According to the forecast of the energy information Administration US (EIA) average price of Brent in 2020 will amount to 34.13 dollar and 45,62 2021-m, and West Texas WTI — 30,10 this year and 43,31 in the next.