David Feldman

Three Things to Know in Energy 7/3/2017

Blog Post created by David Feldman Champion on Jul 3, 2017

1. U.S. drilling is down for the first time in months.


After meandering down for the last few weeks, oil prices increased today (Monday) after news that U.S. drilling activity is down for the first time in six months.  Brent crude futures are up 16 cents, or 0.3 percent, to nearly $49 per barrel.  U.S. West Texas Intermediate (WTI) crude futures increased 24 cents, or 0.5 percent, to just over $46 per barrel.  The boost in prices is mainly attributed to the fact that U.S. oil production fell for the first time since January, dipping by two rigs and breaking a 24-week streak of rig count increases.


2. Baker Hughes and GE Oil & Gas to merge.


In deal scheduled to close today (Monday) Baker Hughes and GE Oil & Gas will merge and be known as "Baker Hughes, a GE company".  Shareholders approved the merger last Friday, finalizing what analysts have been expecting and projecting for some time now.  This newly formed company will be traded on the New York Stock Exchange under the ticker symbol of BHGE and be the second-largest oilfield services company in the world behind Schlumberger.


3. French energy giant Total looks to invest in Iran’s oil fields.


Total, the French energy giant, will be signing a multi-billion-dollar contract today (Monday) to develop Iran’s South Pars gas field.   Total will take a 50.1 percent stake in the $4.8 billion dollar project along side China National Petroleum Corporation (CNPC), that will own 30 percent and Iran's Petropars that will own 19.9 percent.


The investment has been talked about form months but Total CEO Patrick Pouyanne stated he’s been waiting to see if the new US administration of President Donald Trump would reimpose sanctions on Iran.  When signed, this contract will be the largest foreign deal since sanctions were eased last year.


This isn’t Total’s first foray in Iran.  The French energy firm headed the development of phases two and three back in the 90’s but left Iran in 2012 when the European Union partners imposed sanctions on Iran, including an oil embargo.