The entrance to JPMorgan Chase's international headquarters on Park Avenue is seen in New York October 2, 2012.
Credit: Reuters/Shannon StapletonView the original article here
The entrance to JPMorgan Chase's international headquarters on Park Avenue is seen in New York October 2, 2012.
Credit: Reuters/Shannon StapletonView the original article here
A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013.
Credit: Reuters/Lucas JacksonView the original article here
Apache Corp Chairman and CEO Steven Farris speaks during the CERAWeek energy conference in Houston in this March 8, 2012 file photo.
Credit: Reuters/Richard Carson/FilesBy Ernest Scheyder and Braden ReddallNEW YORK/SAN FRANCISCO | Fri Aug 23, 2013 3:46am EDT
NEW YORK/SAN FRANCISCO (Reuters) - Apache Corp (APA.N) faces a difficult choice in Egypt: whether to sell its substantial oil and natural gas operations in the country or wait out the recent bloodshed.
The Texas-based energy company has said it is assessing the value of its Egyptian interests, which account for roughly a fifth of its global oil and gas production and 27 percent of its revenue last year.
While production has not been affected so far by the violence, Apache's shares have fallen 5 percent since July 3, when former Egyptian President Mohamed Mursi was overthrown. Many analysts believe the turmoil contributed to the dip.
"The sooner they get the hell out of there, the better," Oppenheimer & Co analyst Fadel Gheit said. "Investors have plenty of risk in the stock market. They don't want civil war risk in their portfolios, too."
But selling now would likely mean accepting a price undercut by political uncertainty. At the end of 2012, about 7 percent of Apache's oil and natural gas assets were in Egypt, worth roughly $854.1 million. Analysts said it was hard to put a current value on the operations because of the turmoil.
"Apache is not going to resort to a fire sale," said Gheit, "But it's a long-term challenge if they decide to stay and operate there."
The quandary is not unique to Apache. More than 250 U.S. companies, ranging from Dow Chemical Co (DOW.N) to Citigroup Inc (C.N), operate in Egypt, where the army-backed government has instituted a month-long state of emergency.
Apache and other Western companies are now weighing whether the risks of operating in Egypt outweigh the rewards.
Last week, General Motors (GM.N), Electrolux (ELUXb.ST) and BASF (BASFn.DE) temporarily closed facilities in Egypt, citing the unstable security situation. BG Group (BG.L) and BP (BP.L) pulled out non-essential expatriate staff last month.
Kristian Ulrichsen, a fellow at the policy-focused Baker Institute in Houston, saw less risk in the short term for companies working in Egypt than later on, when the reverberations from the government crackdown are felt.
"The longer-term risks are a whole segment of the population being cut out of the political roadmap. That's something that will play out over years," he said, citing Algeria's bloody civil war in the 1990s as a worrying precedent. "I hope Egypt won't go down that route, but you can see the danger."
Apache, which bought BP's oilfield stake in the western Egyptian desert for $650 million in 2010, has more than $1.3 billion in insurance policies covering its Egyptian operations in the event the government confiscates its assets, cancels contracts or nationalizes the oil industry.
"We're watching the situation closely," Apache spokesman Patrick Cassidy said.
POTENTIAL VS REALITY
The Texas-based company's 9.7 million acres in Egypt, of which it so far has only developed 18 percent, promise "considerable exploration and development opportunities," according to securities regulatory filings.
A U.S. Energy Information Administration report last month singled out exploration by Apache as being responsible for many of the oil discoveries in Egypt during the past five years.
Apache declined to say how many employees it has in Egypt. Brokerage Raymond James estimates Apache has roughly 200 expatriates and as many as 10,000 local workers.
"The most important thing about Egypt is it generates a tremendous amount of cash flow," Apache Chief Executive Steve Farris said on a conference call with investors this month.
"And we just need to figure out a way to validate that value without giving up that value," he added. Analysts interpreted his comments to mean a sale of the assets was probable.
A Chinese oil company could be a likely buyer of Apache's Egyptian assets given China's long-standing interest in Africa and need for oil, said Oppenheimer's Gheit. Proceeds from a sale would allow the company to buy back shares and trim its $12.3 billion debt load, he said.
In a step largely seen as a positive for foreign oil companies, Egypt's oil ministry on Thursday named Tarek El Molla as the head of Egyptian General Petroleum Corp (EGPC), which is Apache's partner in the country. Molla, a long-time EGPC employee, previously ran the state-run company's foreign trade and operations unit. Still, he is the third head of EGPC so far this year.
Analysts at Raymond James said the fears about Egypt for Apache's stock appeared overdone, noting that all parties have an interest in maintaining stability for oil production.
"Political uprising have happened before and the company has never lost a single barrel of production," Raymond James said in a note to clients.
(Reporting by Ernest Scheyder and Braden Reddall; Editing by Edward Tobin and Leslie Gevirtz)
View the original article here
The entrance to JPMorgan Chase's international headquarters on Park Avenue is seen in New York October 2, 2012.
Credit: Reuters/Shannon StapletonView the original article here
A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013.
Credit: Reuters/Lucas JacksonView the original article here
The logo of French group GDF Suez is seen on a building in the financial district of La Defense, near Paris August 1, 2013.
Credit: Reuters/Benoit TessierPARIS | Thu Aug 22, 2013 4:15am EDT
PARIS (Reuters) - France's business slump deepened in August for the first time in five months, a business survey showed on Thursday, suggesting the economy may be shrinking after a bigger-than-expected rebound in the second quarter.
Data compiler Markit said its flash composite purchasing managers index, which covers both the manufacturing and services sectors, fell to 47.9 from 49.1 in July, after improving every month since April.
While the manufacturing sector's index held steady at 49.7, it missed analysts' expectations that it would rise above the 50 point line dividing expansions from contractions.
Markit said the data suggested the euro zone's second-largest economy would contract by 0.3 percent in the third quarter, after official French data showed an unexpected 0.5 percent rebound in the second quarter.
"From the PMIs we've got no idea where that (second-quarter GDP) growth is coming from. We can't see that in the surveys at all and we're very much scratching our heads," Markit chief economist Chris Williamson said.
"If there was a rise, we think it's looking temporary and could fade in the third quarter."
However, forward-looking indicators in the survey looked more positive. Williamson said that despite the August data, where part of the slump could be due to many businesses shutting down that month, Markit expects the overall 2013 trend of an improvement in its PMI readings to continue.
"There is an easing trend in the PMIs, and given what we've seen in the rest of the region, we expect French businesses to get a little bit more confident as the year goes on and hopefully get those readings above 50, in the service sector most importantly," he said.
While the services sector index was down to 47.7 in August from 48.6 in July, widely missing analysts' expectations of a 49.2 reading, expectations that activity in the sector would improve over the next year stayed at an 11-month high.
New orders in the manufacturing sector rose slightly for the first time in over two years.
The second-quarter growth spurt pulled France out of a shallow recession, easing President Francois Hollande's government's return from a summer break. But tax hikes, rampant unemployment and the outlook for the euro zone as a whole will determine whether the rebound can last.
The quarterly rebound was stronger than most economists expected. When it published its flash PMI for May, Markit had said it expected the French economy to contract by 0.5 percent in the second quarter.
- Detailed PMI data are only available under license from Markit and customers need to apply to Markit for a license.
To subscribe to the full data, click on the link below: here
For further information, please phone Markit on +44 20 7260 2454 or email economics@markit.com
(Reporting by Ingrid Melander; Editing by Hugh Lawson)
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:: Monday August 2
HSBC Holdings interim results - First-quarter earnings nearly doubled thanks to it halving bad debts charges.
Halifax House Price Index - Last month's figures revealed that house prices in June were 0.6% higher than in May, and 3.7% higher than the same month last year.
:: Tuesday August 3
Italy Q2 GDP - The country's economy has shrunk for seven straight quarters.
Standard Chartered interim results.
Greggs interim results.
Legal & General Group half year results.
UK monthly industrial production figures.
:: Wednesday August 4
Bank of England Inflation Report - assessment on intermediate thresholds and forward guidance published alongside report.
TUI Travel Q3 results.
:: Thursday August 5
Tata Motors Q1 results. Tata Motors owns Jaguar Land Rover.
Rio Tinto interim results.
Aviva interim results.
:: Friday August 6
China CPI. The rate rose by more than expected in June, increasing to 2.7% from 2.1% the month before.
(function(d){ var js, ref = d.getElementsByTagName('script')[0]; js = d.createElement('script'); js.id = 'outbrainjs'; js.async = true; js.src = "//widgets.outbrain.com/outbrain.js"; ref.parentNode.insertBefore(js, ref); }(document));:: Monday August 2
HSBC Holdings interim results - First-quarter earnings nearly doubled thanks to it halving bad debts charges.
Halifax House Price Index - Last month's figures revealed that house prices in June were 0.6% higher than in May, and 3.7% higher than the same month last year.
:: Tuesday August 3
Italy Q2 GDP - The country's economy has shrunk for seven straight quarters.
Standard Chartered interim results.
Greggs interim results.
Legal & General Group half year results.
UK monthly industrial production figures.
:: Wednesday August 4
Bank of England Inflation Report - assessment on intermediate thresholds and forward guidance published alongside report.
TUI Travel Q3 results.
:: Thursday August 5
Tata Motors Q1 results. Tata Motors owns Jaguar Land Rover.
Rio Tinto interim results.
Aviva interim results.
:: Friday August 6
China CPI. The rate rose by more than expected in June, increasing to 2.7% from 2.1% the month before.
(function(d){ var js, ref = d.getElementsByTagName('script')[0]; js = d.createElement('script'); js.id = 'outbrainjs'; js.async = true; js.src = "//widgets.outbrain.com/outbrain.js"; ref.parentNode.insertBefore(js, ref); }(document));:: Monday August 2
HSBC Holdings interim results - First-quarter earnings nearly doubled thanks to it halving bad debts charges.
Halifax House Price Index - Last month's figures revealed that house prices in June were 0.6% higher than in May, and 3.7% higher than the same month last year.
:: Tuesday August 3
Italy Q2 GDP - The country's economy has shrunk for seven straight quarters.
Standard Chartered interim results.
Greggs interim results.
Legal & General Group half year results.
UK monthly industrial production figures.
:: Wednesday August 4
Bank of England Inflation Report - assessment on intermediate thresholds and forward guidance published alongside report.
TUI Travel Q3 results.
:: Thursday August 5
Tata Motors Q1 results. Tata Motors owns Jaguar Land Rover.
Rio Tinto interim results.
Aviva interim results.
:: Friday August 6
China CPI. The rate rose by more than expected in June, increasing to 2.7% from 2.1% the month before.
(function(d){ var js, ref = d.getElementsByTagName('script')[0]; js = d.createElement('script'); js.id = 'outbrainjs'; js.async = true; js.src = "//widgets.outbrain.com/outbrain.js"; ref.parentNode.insertBefore(js, ref); }(document));