Russia's plan in action: bankruptcy begins in the US oil industry

Whiting Petroleum, an American hydrocarbon exploration and shale oil company, filed for bankruptcy protection on April 1, 2020. It is reported by Bloomberg.

It is noted that the company is developing oil fields in North Dakota, but its performance has deteriorated over the past four years. At the same time, the onset of the pandemic of the coronavirus infection COVID-19 and the subsequent drop in oil prices on the world market only aggravated the company's position.

It is clarified that the company was not able to pay this week a debt of $ 262 million. Moreover, the total debt of the company has already reached $ 2,2 billion. Therefore, the owners of Whiting Petroleum decided to ask “to understand and forgive”, and at the same time to write off the debt in exchange to transfer control of the company.

Bloomberg points out that the company's difficulties began long before the outbreak of COVID-19. Five years ago, Whiting Petroleum was one of the leaders in shale production in North Dakota. At the same time, competing companies turned their attention to shale oil production in Texas, where costs are significantly lower.

At Whiting Petroleum, they calculated that at a price of oil of $ 50, the company would stay afloat and cope with the debt burden. But the fall in the commodity market was very serious and the price of $ 20 was unacceptable to the company.

At the same time, experts are confident that similar bankruptcies will continue in the United States. For example, analysts at Mizuho Securities USA think that more than 70% of the 6 thousand oil shale producers can stop their work. In turn, Pickering Energy Partners believes that 40% of such companies may go bankrupt in the next two years.

It should be added that on April 1, 2020, Russian leader Vladimir Putin said that Washington was worried about low oil prices because the profitability of shale oil in the United States fluctuated around $ 40 per barrel.

Experts believe that Russia's withdrawal from the agreement with OPEC, which became known in March of this year, was dictated primarily by the desire to oust American shale. Since 2016, the United States has been increasing oil production on a quarterly basis, crushing more and more new markets. Russia, being bound by an agreement with OPEC, was restraining the extraction of “black gold”.

Despite the fact that this allowed the Kremlin to form a solid National Welfare Fund, the Americans were also the winners. Oil at 50-60 dollars per barrel allowed to significantly increase the production of shale oil, thereby damaging the US share in the world market and reducing the share of other players.

In the long run, this situation did not suit Moscow, since oil, according to the statement of Vladimir Putin himself, is the main export product of Russia.
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  1. master3 Offline master3
    master3 (Vitali) April 2 2020 14: 45
    Rave! - there is no other expression.
  2. Lieutenant Rzhevsky I April 2 2020 14: 48
    Whiting Petroleum, an American hydrocarbon exploration and shale oil company, filed for bankruptcy protection on April 1, 2020. It is reported by Bloomberg.

    Think about it. An expert from Brighton Beach explained to us that everything is fine, a beautiful marquise. Now they will go broke, then they will rise like a Phoenix bird, and those who want to invest in them are already fighting in lines. This is not a miserable planned economy for you, this is the Market, just like that, with a capital letter, well, but about his invisible hand and what it is capable of, you are all in the know.
  3. Igor Pavlovich Offline Igor Pavlovich
    Igor Pavlovich (Igor Pavlovich) April 2 2020 15: 02
    Putin's plan in action:

    According to the results of the first quarter of 2020, gas transit through the Ukrainian gas transportation system amounted to 11,1 billion cubic meters. At the same time, since the beginning of 2020, the capacity for the transit of gas from the Russian Federation has been fully paid for by Gazprom in accordance with the new transit deal and in the calculation of 65 billion cubic meters. m per year (178 million cubic meters per day) ", - reported in the company of the Ukrainian GTS Operator on Thursday, April 2.
    1. Lieutenant Rzhevsky I April 2 2020 16: 01
      Quote: Igor Pavlovich
      Putin's plan in action

      Well-known blogger Yuriy Podolyak is talking about a new contract for gas transit through Ukraine.

      Over the five-year period, Ukraine’s losses will amount to almost $ 400 million.
      1. Igor Pavlovich Offline Igor Pavlovich
        Igor Pavlovich (Igor Pavlovich) April 2 2020 17: 49
        Lieutenant, you are clearly from Ukraine, if you are so worried about its losses. And then the conversation about direct losses to all of Russia for the "wise leadership" of the nullified president ...
        1. Lieutenant Rzhevsky I April 2 2020 18: 45
          You are clearly from Ukraine

          Whatever you write, with your finger to the sky. This is talent. Direct losses? But.
  4. gorenina91 Offline gorenina91
    gorenina91 (Irina) April 2 2020 16: 10
    Experts believe that Russia's withdrawal from the agreement with OPEC, which became known in March of this year, was dictated primarily by the desire to oust American shale

    - Well, well ... - Yes, just Russia finally saw (it’s strange that it didn’t see it before) that the United States and China were simply "throwing" it ... - Yes, they are just simply "bred" ...
    - That is, when Russia was once again called to another useless for Russia gatherings in Opek, where Saud, who was engaged for these gatherings, was already sitting. Arabia, then Russia was once again not even given a chair, where Russia could at least sit down "on equal terms" ... - And then they simply began to dictate to Russia ... - they say, it must do this and that; that, they say, no one is lifting the sanctions from it (or they may even add if it behaves "not so") ... - At the same time, Saud. Arabia has stated that it sets the price of oil and the volume of oil production; moreover, taking into account the fact that American shale oil also has its own solid quota in Europe, due to the share of "pushing back and yielding" to Russia ... - That's all ... - And China stood under the window and was already saliva for the Russian oil that will not find its buyer in Zap. Europe ... - and China will get it at a bargain price (which actually happened) ...
    - Well, here is our docile, unhappy and compliant guarantor "from the comrade" ... - just really could not agree with this ... - And who can agree with this ... - Well, Russia went to " free swimming ", not knowing how to swim ... - Or rather, there are a lot of people in Russia who can swim very well, but they are not at the helm and sit on land ... - And Russia ... flounders like that .. - and even Chinese nets, with a Chinese catch trying to pull out on himself ... - for China ...
    1. Rashid116 Offline Rashid116
      Rashid116 (Rashid) 10 May 2020 10: 47
      I wanted to put a plus sign for you, but it doesn’t work out. Such is the bald nullified freedom of speech))
  5. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) April 2 2020 16: 42
    I drove into the search and:

    From the beginning of 2015 to November last year, 208 companies in the United States and Canada declared their financial insolvency.

    40 per year. 3 per month.

    Something started to go bankrupt late this year!
  6. Arkharov Offline Arkharov
    Arkharov (Grigory Arkharov) April 2 2020 16: 59
    What is the other plan? Was he even there?
  7. Alexander Semenov (Alexander Semenov) April 3 2020 00: 09
    However, today Uncle Sam raised the price of oil, not the RF ... so everything goes according to Uncle Sam’s plan. Who needs to move - move, who needs to be pressed .. squeeze. When the negotiations of the OPEC countries begin, they will naturally be foiled, then the threats of amers will follow, and then there will be a brilliant orchestrated victory signing of all countries.
    1. Lieutenant Rzhevsky I April 3 2020 13: 10
      Your uncle was blown away.
  8. Dmitry S. Offline Dmitry S.
    Dmitry S. (Dmitry Sanin) April 3 2020 13: 50
    What does Russia have to do with it? U.S. extractive industry domestic debt and stock bubbles. What does Russia have to do with any plans? Any bubble should burst. The time has come.