Credit Suisse Reports Alarming Magnitude Of Losses And Outflows

By ZeroHedge - Apr 25, 2023, 12:30 PM CDT

Credit Suisse reported Monday that clients had withdrawn 61.2 billion francs ($69 billion) in the first quarter and that outflows were continuing, highlighting the challenge faced by UBS in rescuing its rival in March.

In the last financial statement as an independent company, Credit Suisse reported a loss of 1.3 billion Swiss francs ($1.46 billion) for the first three months of the year. It said "significant net asset outflows" were seen in March. 

Most asset outflows originated from its wealth management unit and occurred in all regions. The troubled bank said, "These outflows have moderated but have not yet reversed as of April 24, 2023." 

Credit Suisse's wealth management unit lost 9% of assets in the first quarter. It said this would slash fees it generates and "likely lead to a substantial loss in wealth management" in the second quarter. 

The Swiss government ultimately forced UBS' $3.25 billion takeover of Credit Suisse last month, and carried significant integration risks. Both banks could see a continued exodus of customers. 

High net worth investors started pulling money out of scandal-plagued Credit Suisse well before the turmoil unleashed in the regional US banking sector in March. Bloomberg said more than 200 billion francs of customer deposits over the last six months flowed out of the troubled bank. 

"The magnitude of losses and outflows is alarming," Keefe, Bruyette & Woods' analysts wrote in a note to clients. They said, "The revenue trajectory is so damaged that the deal could well remain a drag on UBS operating results unless a deeper restructuring plan is announced."

Also, in this morning's announcement, Credit Suisse announced it had terminated a $175 million acquisition deal to purchase the investment bank of Michael Klein (the bank's former director). The deal was supposed to be a plan to spin off Credit Suisse's investment bank under the First Boston name that Klein would operate

 Nigeria Completes Gas Pipeline Without Chinese Funds

By Charles Kennedy - Apr 25, 2023

The Nigerian National Petroleum Corporation (NNPC) has used around $1.1 billion of its own funds so far and has completed work on 70% of a large natural gas pipeline in Nigeria even after a Chinese loan for the project failed to materialize.

Nigeria’s federal government announced in July 2020 that the Bank of China and Sinosure had agreed to finance part of the costs for constructing the Ajaokuta-Kaduna-Kano (AKK) gas pipeline to the economic hub in the north, Kano. In the summer of 2021, reports started swirling that Chinese lenders were reluctant to increase their exposure and finance part of the gas pipeline project estimated to cost $2.8 billion.

Nigeria has started to look for alternative funding for at least US$1 billion of the pipeline’s cost and has started to approach other lenders, including export-import credit institutions, sources told Reuters two years ago.

This week, NNPC Group chief executive, Mele Kyari, said on a site inspection that the AKK Gas Pipeline project was nearly 70% completed, and more than $1.1 billion has been released so far to finance the project. The pipeline is planned to run for 614 kilometers (382 miles) and is currently being financed by NNPC.

The AKK Gas Pipeline line will flow 2 Bscf/d and will power industries and power plants and create gas-based industries, Kyari said. By the third quarter of this year, NNPC will complete the entire welding job on this line, he said while visiting a construction site along the pipeline’s route. 

“We have so far spent over $1.1 billion on this project from our cashflow,” NNPC’s Kyari said.

“We are a commercial company today. We have inter-company loans within our company now. This company can fund this project, so we do not need any support to deliver this project now.”

By Charles Kennedy for Oilprice.com

Pipeline Failure Triggers Inspection Of Davis-Besse Nuclear Power Plant

By Charles Kennedy - Apr 26, 2023, 9:30 AM CDT

The U.S. Nuclear Regulatory Commission has launched an inspection into ground settling at the Davis-Besse nuclear power plant in Ohio.

The reason for the inspection is information that suggests a 2022 pipeline failure was likely the result of stress from ground settling, Reuters has reported.

The pipeline failure occurred in October last year, the report noted, and there were also later reports of pipeline failures on the site of the nuclear power facility and “multiple occurrences of ground settling.”

“A certain extent of ground settling is normal,” a spokeswoman for the Nuclear Regulatory Commission said, as quoted by the Toledo Blade.

“Some ground settling happens everywhere. Here, what triggered this was in October 2022, a firewater underground pipeline broke. It was not available for about an hour,” Victoria Mitlyng also said.

The spokeswoman also said the team that was sent to investigate would publish a public report 45 days after it completes its work on the Davis-Besse power plant.

Ground settling is a potentially serious issue when it comes to nuclear power plants and on one occasion led to the cancellation of a whole project, which cost its developers a lot of money.

The Midland nuclear power plant, a project of Consumers Power Company, was canceled in 1984 when it was 85% ready. The project was 13 years behind schedule and 20 times over budget.

While there were plenty of reasons for the cancellation of the Midland project, including changing regulatory standards, financial problems, and interest rates, ground settling has also been listed among these.

“Settling can be tolerated as long as it does not compromise safety margins,” nuclear safety engineer David Lochbaum told the Toledo Blade. “If the only safety consequence from settling were potential rupture of piping, the solution could be to shore up the foundation or relocate the piping.”

GM Pulls The Plug On Bolt EV

By ZeroHedge - Apr 26, 2023

General Motors Chair and CEO Mary Barra announced that production of the Chevrolet Bolt EV and Bolt EUV would be halted by the end of 2023. This aligns with the GM's plan to transition the Bolt production line in Orion, Michigan, into manufacturing electric trucks. 

During a Tuesday morning earnings call with investors, Barra confirmed the seven-year run of the Bolt would come to an end and be retooled for electric truck production: 

"We've progressed so far that it's now time to plan the end of Chevrolet Bolt EV and EUV production, which will happen at the end of the year."

GM's decision to kill Bolt production comes after a series of battery fires over the last few years and at least one major recall (read: "After Multiple Recalls, GM May Be On The Verge Of Ending Production Of Its Chevy Bolt").

Barra acknowledged the loyalty of Bolt owners but noted that some customers were furious by the EV's defects, which led to battery fires. GM had to recall 142,000 vehicles as a result. Some Bolt customers faced delays in receiving new batteries, while others could not drive their vehicles due to the fire risk. This manufacturing mishap hindered GM's progress in the EV market.

In 2023, GM has three new EV models for mass-market across the Chevrolet brand, including the Silverado truck, Blazer, and Equinox. The new models might rekindle GM's EV growth strategy after the Bolt fizzle.

By Zerohedge.com

IEA: EVs Will Account For 20% Of All Car Sales This Year

By Tsvetana Paraskova - Apr 26, 2023

The surge in electric vehicle sales will continue this year after a record 2022, with EVs accounting for nearly one-fifth of global car sales in 2023, the International Energy Agency (IEA) said on Wednesday. 

The momentum of EVs taking a growing share of the global car market is set to continue in the coming years to the point of displacing 5 million barrels per day of oil, the IEA said in its annual report Global EV Outlook 2023.

Last year, EV sales accounted for 14% of all new cars sold globally, up from around 9% in 2021 and less than 5% in 2020. China, Europe, and the United States continue to dominate EV sales, with China the frontrunner once again, accounting for around 60% of global electric car sales.  

“More than half of the electric cars on roads worldwide are now in China and the country has already exceeded its 2025 target for new energy vehicle sales,” the IEA said. 

EV sales in Europe, the second-largest market, rose by more than 15% in 2022, meaning that more than one in every five cars sold was electric. EV sales in the United States—the third-largest market—surged by 55% in 2022, reaching a sales share of 8% of the U.S. new car market, according to IEA data. 

Sales of EVs are also starting to take off in other key markets, including India, Indonesia, and Thailand, the IEA’s Executive Director, Fatih Birol, said.

“The trends we are witnessing have significant implications for global oil demand. The internal combustion engine has gone unrivalled for over a century, but electric vehicles are changing the status quo,” Birol said in a statement. 

“By 2030, they will avoid the need for at least 5 million barrels a day of oil. Cars are just the first wave: electric buses and trucks will follow soon,” the IEA’s executive director added.  

Mozambique President Greenlights $20 Billion TotalEnergies LNG Project

By Michael Kern - Apr 26, 2023

It is now safe for TotalEnergies to restart work on the $20-billion Mozambique LNG project, Mozambique's President Filipe Nyusi said on Wednesday, but the French supermajor says the decision to resume construction is up to all shareholders in the venture. 

"The working environment and security in northern Mozambique makes it possible for Total to resume its activities any time," Nyusi said today at an energy conference in Mozambique's capital city of Maputo, as carried by Reuters.

TotalEnergies holds a 26.5% stake in the LNG project, which was put on hold in 2021 following Islamist militant attacks in towns close to the site. The project site is close to Palma in the Cabo Delgado province, where Islamic State-affiliated militants have been active for a few years. In the spring of 2021, Islamic State-affiliated militants raided Palma in attacks that left dozens of people killed.  

"The restart is a decision of Mozambique LNG, not a decision of TotalEnergies, which only owns 26.5% of the project. Given the context, the decision will have to be unanimous and TotalEnergies' position is that it is appropriate to take the time to have the expected assurances before considering a possible restart," TotalEnergies spokesperson Stephanie Platat told Reuters on Wednesday. 

The Mozambique LNG project is not expected to start operations until 2027 at the earliest, even if TotalEnergies quickly decides to lift the force majeure on the works and proceed with development, Stephane Le Galles, project director at TotalEnergies, told Bloomberg last month while on a visit to the construction site in northeastern Mozambique.

"From the time we restart to production, we need another four years to build the facility," Le Galles said. 

In February, TotalEnergies CEO Patrick Pouyanné visited Cabo Delgado and entrusted Jean-Christophe Rufin, an expert in humanitarian action and human rights, with an independent mission to assess the humanitarian situation in the province. 

TotalEnergies has yet to decide when to resume the project, with several conditions needed for a positive decision, Le Galles told Bloomberg last month. Those include the same project costs, an improved security situation, Mozambique government officials returning to the towns of Palma and Mocimboa da Praia, and an assessment of the human rights conditions in the Cabo Delgado province. 

EPA Targets Gas-Fired Power Plants With Carbon Capture Requirements

By Charles Kennedy - Apr 24, 2023

• The EPA plans to require gas-powered plants to capture carbon dioxide emissions.
• The new rules could be made public this week.
• 
  
• "These standards could level the playing field between new gas plants and new renewable energy," a Sierra Club official told Reuters.

The Environmental Protection Agency plans to adopt requirements for gas-fired power generators to capture the carbon dioxide emissions of their facilities, Reuters has reported, citing unnamed sources.

According to the sources, the new rules could be made public as soon as this week to cover both new and existing power generation facilities running on natural gas. Natural gas, Reuters notes, accounts for a quarter of total U.S. carbon emissions.

Once these rules come into effect, utilities will have to choose what to invest in: gas-fired plants with carbon capture and storage systems in place or renewables.

"These standards could level the playing field between new gas plants and new renewable energy," a Sierra Club official told Reuters, which noted that currently, most U.S. gas-fired plants do not pay for the carbon emissions they generate.

Yet the remark also raises the question of just how cheap wind and solar actually are if they need a leveling of the playing field with natural gas.

Natural gas accounts for the biggest chunk of fossil fuel power generation in the United States. Last year, the total share of fossil fuels in the mix was 60 percent, and of that, 60 percent was natural gas, with the rest coal.

Yet the fast decarbonization of the grid that the Biden administration is envisioning in its climate plans requires this to change, and carbon capture is a big part of how this change will be effected.

To encourage more carbon capture, the Inflation Reduction Act features an increase in carbon capture credits from $45 per ton to $85 per ton of carbon dioxide removed from a smokestack. For carbon captured from the air, the incentive is a lot more generous at $180 per ton.

Naturally, environmentalists are not fans of carbon capture, arguing that it will only extend demand for fossil fuels over time instead of discouraging it.

By Charles Kennedy for Oilprice.com