UPDATE 1-Toshiba to cut 7000 jobs in PC and TV units, sees FY loss

24 Dec 2015 | Author: | No comments yet »

Toshiba Forecasts Record $4.5 Billion Loss, Plans Job Cuts.

But the world’s No. 3 producer has been pumping at the fastest pace since the collapse of the Soviet Union, adding to the flood on an already-swamped market and helping push prices to the lowest levels since 2009. Russia’s unexpected oil bounty this year is the result not of a new Kremlin campaign but of dozens of modest productivity improvements across the sprawling sector.

Even pressured by plunging prices, as well as U.S. and European Union sanctions that cut access to much foreign financing and technology, Russian companies have managed to squeeze more crude out of some of the country’s oldest fields. With a rise of 0.5 percent in the first nine months of 2015, Russia hasn’t boosted production as much as its larger rivals, the U.S. (up 1.3 percent) and Saudi Arabia (up 5.8 percent), according to Citigroup Inc. But having ignored OPEC’s calls earlier this year to join efforts to support prices by pumping less, Russia is keeping up with the cartel. “I know of no one who had predicted that Russian production would rise in 2015, let alone to new record levels,” said Edward Morse, Citigroup’s global head of commodities research. With most of the capital already committed, operating costs now are relatively low and output of gas condensate, a light and especially valuable form of crude, is up five-fold this year. One side effect of falling oil prices — the 52 percent plunge in the ruble over the last two years — has helped Russian oil producers, chopping their costs in dollar terms since between 80 and 90 percent of their spending comes in rubles. “I don’t know what the oil price would have to fall to for things to change dramatically,” Stavskiy said. “We’ve been through $9 a barrel and production continued, so if something like that happens, we know what to do.” To be sure, few in the industry expect Russia to be able to sustain the current performance for more than a few years.

Tax hikes and lack of financing have cut deeply into exploration drilling, which is down 21 percent this year, and handicap the larger new projects that are needed to replace the country’s older fields as they run dry. “There is, however, only so far such efficiency gains can go and we are probably near the peak of output today,” said Chris Weafer, a partner at consultants Macro Advisory. Stavskiy’s Bashneft also benefited from some special tax breaks for older fields, although he said the savings wasn’t decisive for the company’s investment choices. “We’re up 3 percent since the beginning of the year at our mature fields in Bashkiria, the oldest of which has been in production for 83 years and already produced 1.7 billion tons (12.5 billion barrels) of oil,” Stavskiy said. Bashneft, working with Schlumberger Ltd., set up a high-tech geology center in its headquarters near the fields, allowing engineers to model deposits in real time and drillers to target where the remaining oil is. Though only about 0.7 percent of total Russian oil output, that gain is likely to be enough to keep the record pace going, said Alexander Nazarov, an oil and gas analyst at Gazprombank.

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