COMMODITY FETISH

Pink Floyd is seeking US$500M for music catalog including 'The Wall'

Lucas Shaw, Bloomberg News

Journalists film with their cameras an installation part of the Pink Floyd Exhibition: "Their Mortal Remains", in Rome, Tuesday, Jan. 16, 2018. , Gregorio Borgia/AP Photo

Members of the rock band Pink Floyd are seeking at least $500 million in a deal for their music catalog, according to people familiar with the talks, which would be one of the largest sales in music history.

The group known for hits such as “Money” and “Comfortably Numb” is selling its recording and songwriting catalog, as well as the power to create merchandise based on the band, said the people, who asked not to be identified because the talks are confidential. Patrick McKenna, who is representing the band in the process, didn’t respond to an email seeking comment.

McKenna has winnowed the list of potential buyers to four, said the people. The names include Warner Music Group Corp., Sony Music Entertainment and BMG. Sony and Warner already distribute some of Pink Floyd’s music.

The British rock band released some of the most popular records ever, including “Dark Side of the Moon” and “The Wall,” two albums that defined music in the 1970s. The group has sold 75 million records in the US, the 10th most of any artist, according to the Recording Industry Association of America.

Many famous musicians have cashed in on a frothy market for song catalogs in recent years, capitalizing on interest from both music companies and financial firms. Bob Dylan sold his recordings to Sony Music in a deal estimated to be worth more than $150 million, and his song catalog to Universal Music in a deal for between $200 million and $300 million.

Investors are starting to grow wary of shelling out for music portfolios due to rising interest rates and uncertainty about the economy. But demand has held steady at the very top of the market.

Getting all of the members of Pink Floyd to agree on anything has been a challenge for decades. The band formed in 1965 under the direction of then lead singer Syd Barrett, who left three years later. Singer and bassist Roger Waters left the band in 1985 and later sued his fellow band mates over their use of the name. Waters and the rest of the crew have squabbled over the years as the band, led by guitarist David Gilmour, continued to release records. 

That is a big reason they chose McKenna, who runs the UK-based advisory group Ingenious Media, to guide them through the process.

Kurdistan Looks To Set Up Own Oil Firms Amid Legal Struggle With Baghdad

By Tsvetana Paraskova - Jun 17, 2022, 

Amid an escalating dispute with the federal Iraqi government over the control of oil resources, the semi-autonomous region of Kurdistan is working to establish two companies that would produce and market oil, a spokesperson for the Kurdistan Regional Government (KRG) told Reuters on Friday.

KRG wants to establish one company to work on oil exploration, KROC, and another—provisionally named KOMO—which is expected to market and export the crude oil pumped in the region of Kurdistan.

The KRG has recently discussed the idea of establishing those companies with representatives of the federal government of Iraq, the spokesperson told Reuters.

The region of Kurdistan and the federal government have been in a bitter dispute for months over who has the right to control the oil resources and revenues in the semi-autonomous Iraqi region.

Earlier this month, Kurdistan rejected a ruling from Iraq’s federal supreme court to hand over control over oil production. 

In February, the Supreme Court of the Federal Government of Iraq ruled that sales of oil and gas by Kurdistan, independent of the central government in Baghdad, are unconstitutional and that the Kurdistan Regional Government must hand over all oil production to the Federal Government of Iraq. The court also ruled that the Ministry of Oil has the right to: “Follow up on the invalidity of oil contracts concluded by the Kurdistan Regional Government with foreign parties, countries and companies regarding oil exploration, extraction, export and sale.”

In early June, dismissing the Supreme Court ruling, Kurdistan’s judicial council said that “The actions of the Kurdistan Regional Government (KRG) in relation to oil and gas operations are in accordance with the Iraqi constitution of 2005. The provisions of the oil and gas law issued by the parliament of the Kurdistan region in 2007 do not violate those of the Iraqi Constitution.”  

By Tsvetana Paraskova for Oilprice.com

Freeport LNG Extends Force Majeure Until September

By Julianne Geiger - Jun 17, 2022, 

Freeport LNG has declared a force majeure on LNG exports from its Gulf Coast location until September, Bloomberg sources said on Friday.

The company had reported earlier in the week that its Gulf Coast facility would be completely offline through September when it would operate in a partial capacity through the end of the year. It did not, however, specify a force majeure.

The original estimate for Freeport LNG’s outage was three weeks, but the estimate was quickly revised to span until September as the damage from a fire last week was assessed.

As a result, U.S. LNG exports are expected to remain subdued at least through September. This would keep more LNG for domestic use beyond what the market requires—a reality that has sent U.S. LNG prices down. On the other hand, Europe, starving for LNG imports from anywhere that isn’t Russia, has seen higher LNG prices as its U.S. prospects were dashed by the facility’s fire.

The Houston-based Freeport LNG facility accounts for 20% of all LNG processing in the United States, at 2.1 Bcf a day. It is the 7^th largest LNG facility in the world, and the United States’ 2^nd largest.

The impact of the Freeport LNG shutdown became even more significant this week after Russia cut its gas flows to Germany and Italy, with France not receiving any gas from Germany since Wednesday. What’s more, Russia’s Nord Stream 1 pipeline that carries gas from Russia to Europe will be down for weeks for regularly scheduled maintenance in July.

The outages and curtailments will force some European countries to burn some of the gas that it was trying to store for the upcoming winter season, although Germany said it would look to Norway and the Netherlands for additional gas supplies.

By Julianne Geiger for Oilprice.com

Iraq Wants To Buy Exxon’s Stake In Key Oil Field

By Irina Slav - Jun 20, 2022,

The Iraqi government is ready to buy Exxon's stake in the West Qurna-1 oil field, the country's oil minister said this weekend, after the supermajor earlier announced plans to exit the project.

Per news reports from Reuters and Bloomberg, the bulk of the 32.7-percent interest in one of Iraq's largest fields will go to Basra Oil Company.

Earlier this year, Exxon had agreed with two Chinese companies to transfer its West Qurna-1 stake to them, but the Iraqi government was not on board with that deal, and it was never finalized. Exxon's stake in West Qurna-1 was valued at up to $500 million in 2020 when the supermajor announced its plan to exit Iraq.

As for the reasons for the exit after a long involvement in Iraq's oil industry, at the time, Iraqi Prime Minister Mustafa al-Kadhimi said that "Exxon Mobil is considering exiting Iraq for reasons that are to do with its internal management practices, decisions, and not because of the particular situation in Iraq."

At the time, Al-Kadhimi said that Iraq would only accept another American company as a replacement for Exxon at West Qurna-1.

Media, however, suggested that the decision might have something to do with worsened relations between the supermajor and the Iraqi government after Exxon got involved in oil production in the Kurdistan autonomous region, whose leadership is at odds with Baghdad.

Iraq is the second-largest producer of oil in OPEC, but it has been struggling to produce as much oil as it had been assigned under the OPEC+ agreement reached last year.

Despite the problems plaguing its oil industry, however, Iraq has ambitions of higher production still, eyeing an average daily of 4.51 million barrels for this month and 4.58 million barrels for July, per a Bloomberg report. In May, Iraq produced 4.4 million barrels of oil daily, a decline of 21,000 bpd from April.

By Irina Slav for Oilprice.com

 

Ecuador Halts All OIl Operations Amid Escalating Protests

By Michael Kern - Jun 20, 2022, 

Ecuador's state-owned oil company Petroecuador declared force majeure across exploration, production, and transportation operations amid escalating protests against the government.

This means that exports of oil from the Andean country will be halted, as protesters entered oil fields, Reuters reported, citing a statement by Petroecuador.

The protests by indigenous peoples in Ecuador against the economic policies of the government of Guillermo Lasso, which have recently included fuel price hikes, prompted the president to declare a state of emergency across three provinces. This, however, did not stop the protests, as people demanded cheaper fuel and food price controls, Al Jazeera reported.

The state of emergency was motivated by the high degree of violence erupting among protesters in the three provinces where it was declared, with President Lasso saying, "I called for dialogue and the answer was more violence, there is no intention to find solutions."

In addition to the economic demands of the protesters, they also want a suspension of new mining and oil projects, Reuters reported. As a result of these protests, Petroecuador said it had lost some 6,975 barrels of crude and has had to suspend some drilling operations.

Ecuador has proven reserves of some 8.273 billion barrels of crude oil but is producing only about 400,000 bpd. Petroecuador, however, has the ambition to double this over the next five years and is looking for private sector investments of up to $12 billion to do it.

"In order to complete these projects within the planned deadlines, private capital and adequate regulations to provide legal certainty to those keen to invest in the hydrocarbon sector will be needed," the state company said earlier this year as quoted by Reuters.

"There are approximately 45 billion barrels of oil identified and only 14% is being produced, a figure that shows resources are not used properly," said the chief executive of the company separately.

By Michael Kern for Oilprice.com

People Rally In Belgium To Protest Soaring Cost Of Fuel, Food

By Tsvetana Paraskova - Jun 20, 2022, 

More than 70,000 people rallied in Belgium’s capital Brussels on Monday in a protest against the soaring cost of guel and food, while strikes at transportation services brought the city home to many of the EU institutions to a standstill.

Workers at the Brussels airport and at local transport networks went on a one-day strike, demanding the government take action against surging prices of food and fuel.

Departures at the airport were canceled as security personnel were also on strike. Most arrivals were also canceled.

Inflation in Belgium and all other European countries has spiked in recent months, to 9 percent this month, as the Russian invasion of Ukraine has sent commodity and fuel prices sky-high and has disrupted supply chains globally, which were still reeling from COVID-related disruptions.

Inflation in Belgium in May was just below 10 percent, the country’s National Bank said in an assessment last week, expecting a gradual easing of the inflation to below 2 percent by the autumn of 2023, barring a wage-price spiral. Wage costs are unprecedentedly high, posing a threat to the competitiveness of the Belgian economy, the bank said.

Workers in Belgium have received pay rises indexed to inflation in recent months. Belgian Prime Minister Alexander De Croo has said workers and employees are better protected against inflation than many other EU workers because of the wage indexation to inflation.

The Belgian National Bank has described the spike in energy prices as “a major impoverishment for the Belgian economy.” Yet again, the inflation-indexed wages have spared many Belgian households from the worst of the energy price surges, the bank said.

Belgium’s pace of economic recovery from COVID is set to slow to 2.4 percent growth in 2022 and 1 percent in 2023, “notably as the consequences of the embargo of the European Union on Russian oil materialize,” Organisation for Economic Co-operation and Development (OECD) said in a report earlier this month. Core inflation is forecast at close to 5 percent through 2023 before easing.

By Tsvetana Paraskova for Oilprice.com

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Namibia Bets On Recent Major Oil Discoveries To Double Its Economy

By Tsvetana Paraskova - Jun 21, 2022,

Following several offshore oil discoveries in recent months, Namibia hopes that the major oil finds could help it double its economy in the next two decades, the head of the National Petroleum Corporation of Namibia (NAMCOR) told Bloomberg on Tuesday.

Since the beginning of the year, oil majors Shell and TotalEnergies have announced discoveries offshore the African country.

“More than 30 years of exploration and we finally we hit the jackpot,” Jennifer Comalie, NAMCOR’s chairperson, told Bloomberg in an interview.

“At peak, these two discoveries could bring $5.6 billion to a very small economy,” Comalie said.

The economy of Namibia, neighbor to the south of OPEC producer Angola, is currently valued at around $11 billion.

Namibia could begin production around 2030 or a little bit earlier if appraisals for the recent discoveries support initial estimates and, of course, majors commit to developing those discoveries while they look to become net-zero energy companies by 2050.

In April, Shell said it was “very encouraged” by the early results from the deep-water Graff-1 exploration well completed earlier this year.

“Over the coming months, we’ll need to conduct further evaluation of the well results, and additional exploration activity, in order to determine the size and recoverable potential of the hydrocarbons that were identified,” said Dennis Zekveld, Shell’s Country Chair in Namibia.

Shell also made a second discovery in the Orange basin in April.

In the same basin offshore southern Namibia, TotalEnergies has made a significant discovery of light oil with associated gas on the Venus prospect, the French supermajor said in February this year. TotalEnergies also needs to proceed with appraisal drilling operations in the area in order to assess the commercial prospects for the discovery.

“This discovery offshore Namibia and the very promising initial results prove the potential of this play in the Orange Basin, on which TotalEnergies owns an important position both in Namibia and South Africa” said Kevin McLachlan, Senior Vice President Exploration at TotalEnergies.

By Tsvetana Paraskova for Oilprice.com