BP's business activities in the US helped generate close to $143 billion (€121 billion) in economic impact in 2013 and currently support nearly 220,000 American jobs, according to the company's recent US Economic Impact Report 2014.
Released early January, BP's new report provides a detailed, state-by-state look at the breadth and impact of the company's activities in America. Since 2009, BP has invested nearly $50 billion (€42 billion), making it America's largest energy investor. In 2013 alone, BP spent $22 billion (€18.6 billion) with vendors across the country on products and services, ranging from offshore drilling rigs to gasoline-producing equipment for its refineries.
“No energy company has invested more in the US over the past five years than BP,” said John Mingé, BP America Chairman and President. “Our investments not only provide the energy to power the nation, but they also support hundreds of thousands of jobs that fuel the economy.”
BP's business investments in the US include oil and natural gas exploration and production, fuel and chemical refining, lubricants, shipping, trading, renewable energy production and technology research and development. The US also is home to a number of operations that serve BP's global businesses, such as the Centre for High-Performance Computing in Houston, which houses the world's largest supercomputer for commercial research. Nearly 40% of BP's publicly traded shares are also held in the US.
Oil traders and tanker-owners are set to cash-in on falling oil prices as tumbling prices have caused the market to move into a steep ‘contango’, meaning that investors are willing to pay a premium to receive oil at a later date, according to KPMG.
The depressed demand picture coupled with the abundant global oil supply has seen oil prices fall to near six-year lows. As a result of this, the price for oil in the spot market has traded below the price of oil for future delivery, a market condition known as contango. This differs to a normal backwardation structure where the price of a futures contract trades below the expected spot price.
KPMG says that traders with storage ability will be able to cash-in on the contango market by storing the oil and locking-in higher future prices. At today's prices, September 2015 Brent crude oil futures are trading at a $6.35/barrel (€5.4/barrel) premium to February 2015.
George Johnson, Executive Advisor in KPMG's oil and gas practice said: “The widening contango we've seen over the last few weeks will benefit traders with access to storage facilities. This means traders are not forced to sell at the current spot price; instead, they can store the oil and lock-in a higher future price - providing shareholders with almost risk-free profits. In a contango market the trader with storage options is the one holding the aces.
“Over the coming weeks traders will be reviewing their storage economics with a view to capitalising on this market phenomenon which looks set to stick around for a while.
“Tanker-owners also look set to benefit from the Brent crude oil contango situation as traders seek alternative storage options. Further weakness in the Brent structure will almost certainly make floating storage a viable option”
However, while traders and tanker-owners are set to benefit from the situation, KPMG warns that smaller upstream oil companies operating below break-even levels may struggle.
Anthony Lobo, Head of UK oil and gas at KPMG, said: “There's little comfort out there to suggest prices are due for a significant upside correction any time soon – so further selling pressure is a real possibility. Smaller companies and marginal shale producers without strong balance sheets and access to funding, may struggle to weather the storm, particularly if there are further price falls in the pipeline. We've already seen significant cutbacks to capital expenditure for 2015 across the industry as a whole; however, we're yet to see scale-backs to production.”
