2024-12-12 11:10

Fuel theft caused $215 million in losses for Petroecuador Violence against oil sector workers includes extortion and physical attacks Increased military patrols and drones deployed to combat fuel theft ESMERALDAS/SANTO DOMINGO, Ecuador Dec 12 (Reuters) - Organized crime groups in Ecuador are increasingly stealing fuel from state-run oil company Petroecuador to support drug trafficking operations, resulting in hundreds of millions in lost income for the country's top industry, the company and officials said. Criminals steal gasoline, diesel and other fuel by tapping state-owned fuel pipelines for use in making cocaine and transporting drugs. They are mounting more violent attacks on oil fields, making off with copper cabling and extorting and beating up workers, the company and its union say. Petroecuador told Reuters that fuel theft led to $215.1 million in cumulative losses during 2022, 2023 and through October 2024 and that illegal taps have grown from 32 in 2022 to 773 through October. While the theft represents a fraction of the $7.5 billion in national income provided by Petroecuador, equivalent to nearly a quarter of the budget, officials are concerned by the boost to drug trafficking offered by the fuel and the impact on beleaguered public coffers. Ecuadorean authorities have not given an overall estimate for drug trafficking earnings for crime groups in the country. The country has 1,655 kilometers (1,030 miles) of state-controlled fuel pipelines, which snake along its Pacific coast and through remote Amazon areas, where communities have protested the industry. Reuters witnesses saw at least nine illegal taps within a 25-meter section of the Esmeraldas-Santo Domingo fuel pipeline, one of eleven such pipelines which move fuel in the Andean country, during a late November visit. At least 136 taps - homemade valves fashioned by criminals - have been discovered on the pipeline this year through October, totaling losses of some $17 million from this 166-kilometer (103-mile) section of pipeline alone. Finding and removing the valves is a time-consuming and expensive process, and the valves also risk fuel spills. PATROLS, DRONES DEPLOYED Murders, drug trafficking, gun smuggling and other crimes blamed by the government on local gangs connected to Mexican cartels, the Albanian mafia and others, have soared over the past five years in previously-peaceful Ecuador. The violence has been illustrated most dramatically by the assassination of a presidential candidate and the on-air invasion of a television studio by an armed gang. The attacks on the energy sector underline the challenges facing President Daniel Noboa, who promised security improvements during his 2023 election campaign and is up for re-election in February 2025. His administration, which did not respond to Reuters questions about fuel theft, has said it has increased military protection of oil installations, including night patrols, and authorized the use of drones to monitor fuel pipelines, which are separate from the country's two crude pipelines. Petroecuador confirmed the government's deployment of the patrols and the drones to Reuters. It is looking for new technology to detect taps more quickly, and at the possibility of a joint command center with police and other entities to speed response. ANATOMY OF A FUEL HEIST Police, citing their intelligence work, allege some of the stolen fuel is used by local criminals to make precursor chemicals they sell to gangs producing cocaine in neighboring Colombia. The gasoline is also used in high-speed boats which move drugs north to Mexico and Central America via the Pacific, they said. For the increase in patrols and other measures to be successful, there must be judicial changes, said Lieutenant Colonel Hugo Amores, the head of the police hydrocarbon crimes unit. "Legal reforms are necessary because if we don't have forceful laws, the work of the police and the armed forces is a joke," Amores said. "It's like a revolving door where we take in detainees and they go out the other side." Fuel crimes can lead to sentences of between 2 months and five years, while organized crime charges can garner 10 years and murder sentences of up to 26 years. More than 90% of fuel pipelines are underground, so criminals dig around a meter down to buried tubing, tapping and connecting it to pressure hoses, which carry fuel to illicit tanker trucks or storage pools hidden on private property. Petroecuador technicians often have to improvise when it comes to repairs, the company told Reuters during its visit. Removing the homemade taps can cause spills or require pumping to be halted, so instead technicians encase the taps in a metal cylinder, preventing the valves from being reconnected to hoses, a process that takes up to five hours. If taps have caused a spill, pumping is halted and clean-up and repair efforts can take up to 12 hours, technicians said. Sometimes up to five taps are reported per day across various pipelines. Pumping on the Santo Domingo-Pascuales jet fuel pipeline is currently halted because it was overrun with taps. The police have seized 18 storage pools used for storing stolen gasoline and diesel this year so far, mostly in the Amazon. "Fuel theft has a systemic value...it's fundamental to the profitability of criminal organizations in Ecuador," Ecuadorean Organized Crime Observatory Director Renato Rivera said. Fuel pipelines in the provinces of Guayas, Santa Elena, Manabi and Esmeraldas, also major hubs for drug transport to the U.S., suffer the most from taps, according to Amores' hydrocarbons crimes unit. About 30,000 gallons of stolen fuel - equivalent to three tanker trucks - are moved clandestinely around the country each day, he said. ROBBERY ROUTES The volume of stolen fuel confiscated by police increased more than 77% over the past year and in November the army reported it had seized an illegal refinery in Amazonian province Sucumbios which had capacity to produce 10,000 gallons of gasoline per week for use in cocaine production. "There are more controls," Amores said, referring to the increase in military presence at oil installations, "but there is also more crime." "The whole (judicial) system in relation to hydrocarbons trafficking is concentrated on immediacy, on people caught in the act and not on the networks of criminal groups that are behind the crime," said security analyst Rivera. "That's why the results are so marginal." The hydrocarbons crimes unit has identified at least four fuel smuggling routes along the border with Colombia and Peru. Theft of copper wiring from oil facilities is not connected to drug production, but has caused $4 million in losses this year and a dip of 1% in output over nine months, Petroecuador said. Petroecuador workers and contractors in some provinces are being extorted - receiving demands for money and threats if they refuse to pay - said union head Jipson Martinez. In Esmeraldas province, home to Ecuador's largest refinery, an estimated 25% to 30% of 700 workers have been extorted, said Martinez, who himself was forced to leave the province after refusing to pay extortion, leading criminals to try to bomb his house in late 2022. "We are defenseless," Martinez said. Sign up here. https://www.reuters.com/markets/commodities/fuel-theft-violence-siphoning-215-million-ecuador-oil-industry-2024-12-12/

2024-12-12 11:00

A look at the day ahead in U.S. and global markets from Mike Dolan With interest rates tumbling across the world and set to fall stateside again next week too, Wall Street stocks are sizing up one of the best years of the century so far. The tech-laden Nasdaq (.IXIC) , opens new tab surged again on Wednesday and closed above 20,000 for the first time ever - almost four times the peaks of the dot.com bubble in 2000 and up almost 35% for 2024 to date. With long-lingering recession fears now dismissed by most investors and U.S. interest rates and taxes set to fall further next year, the broader S&P500's (.SPX) , opens new tab near 28% gain so far this year is a whisker away from its best calendar year since the pandemic hit and close to a first 30%-plus year since 1997. While comparisons with the final throes of the late 1990s bubble may make some uncomfortable, the bulls remain in rude health as futures markets bake in another 25 basis point cut from the Federal Reserve next week despite sticky - if expected - consumer price inflation readouts this week. Facing much weaker economic outlooks and trade war threats, central banks in Europe and Canada are stealing a march on that. And jumbo rate cuts have been the order of the week so far. The Bank of Canada delivered a half point rate cut on Wednesday, even if it colored that with some caution about further moves next year, and the Swiss National Bank on Thursday surprised with a half point cut in its policy rate to just 0.5% - its biggest reduction in almost 10 years. The return of Swiss rates to near zero is a remarkable turnaround for financial markets convinced of a "higher for longer" rate environment worldwide. Even though the SNB said the chances of relapse into negative rates territory was small, it refused to rule it out in any new battle with deflation and an overvalued franc. The franc fell back and Swiss stocks perked up after. The European Central Bank is up next later on Thursday and is widely expected to lop a quarter point off its deposit rate to just 3% - with markets seeing just under a one-in-five chance it joins the Swiss and Canadians with a larger half point cut. On the other side of the planet, China this week shifted its overarching policy orientation to easier money for the first time in over a decade - with Reuters sources saying it's prepared to meet U.S. tariffs with a weaker yuan too. Chinese long-term government yields fell to record lows on Thursday, widening the yield gap with 10-year U.S. Treasuries to the biggest in 22 years and piling more pressure on the yuan. But that yawning gap on Thursday was as much to do with a backup in Treasury yields despite the global easing wave and the cemented Fed rate cut view. Even though bond market volatility gauges (.MOVE) , opens new tab fell on Wednesday to their lowest since before Fed started hiking rates in 2022 and another heavy week of debt sales met with decent demand, 10-year yields crept back above 4.3% for the first time in a fortnight. November's U.S. producer price report and weekly jobless claims numbers are due out later. The frenetic policy easing has helped U.S. crude oil prices perk up above $70 per barrel, with base effects seeing the year-on-year oil price turn positive for the first time since July. The world oil market will be comfortably supplied in 2025, the International Energy Agency said on Thursday, even after OPEC+ extended oil supply cuts and issued a slightly higher than expected demand forecast. The rapidly shifting global interest rate picture left the dollar (.DXY) , opens new tab relatively steady, holding just off Wednesday's best levels against the euro as the ECB was awaited. U.S. stocks futures took a breather ahead of Thursday's bell, dialing back a touch after the tech-led surge yesterday. During that session, Tesla (TSLA.O) , opens new tab shares climbed nearly 6% to a record high as the electric vehicle maker extended a rally in the wake of the U.S. presidential election. Nvidia (NVDA.O) , opens new tab and other megacap growth stocks, including Alphabet (GOOGL.O) , opens new tab and Amazon (AMZN.O) , opens new tab, also finished higher, adding between 1.2% and 5.5%. Apple (AAPL.O) , opens new tab underperformed and edged down 0.5%. Broadcom (AVGO.O) , opens new tab jumped 6%, meantime, following a report that Apple is working with the company to develop its first server chip specially designed for artificial intelligence. Key developments that should provide more direction to U.S. markets later on Thursday: * European Central Bank policy decision and press conference * US November producer price report, weekly jobless claims * Federal Reserve issues Flow of Funds accounts for Q3 2024 * US corporate earnings: Broadcom, Costco * U.S. Treasury sells $22 billion of 30-year bonds Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-12-12/

2024-12-12 10:06

MUMBAI, Dec 12 (Reuters) - The Indian rupee fell to an all-time low on Thursday, pressured by a lingering depreciation bias and heightened demand for the U.S. dollar in the non-deliverable forwards (NDF) market, while the central bank's intervention helped prevent sharp losses. The rupee hit a low of 84.88 against the dollar before closing at 84.8575, down slightly on the day. The dollar index was little changed at 106.5, unfazed by the elevated odds of a December rate cut by the Federal Reserve, after data showed that U.S. consumer prices rose in-line with expectations in November. U.S. bonds yields gained on Thursday. "Increased uncertainties from the incoming Trump administration at a time when the U.S. economy is already resilient suggest that term premium and implied real yields should stay elevated," DBS Bank said in a note. While dollar-rupee forward premiums rose on Thursday in reaction to the heightened odds of a Fed rate cut and on the back of an elevated USD/INR overnight swap rate, they were pegged by the central bank's USD/INR buy-sell swaps later in the session. The one-year implied yield rose 7 basis points to a peak of 2.24% during the session before reversing course to trade nearly flat. The Reserve Bank of India's (RBI) forex swaps, likely intended to avoid directly impacting cash in the system as it supports the rupee, and the arbitrage between the offshore and onshore markets have inverted the dollar/rupee forward premiums curve. The RBI has been routinely selling dollars in the spot market, like on Thursday, to support the local currency as it has consistently hit new all-time lows. Bearish bets on the rupee have climbed to a two-year high, according to a Reuters poll. Investors now await India's retail inflation data, due at 4 P.M. IST, with economists polled by Reuters expecting inflation to have moderated to 5.53% year-on-year in November, down from 6.21% in October. Sign up here. https://www.reuters.com/markets/currencies/rupee-hits-record-low-rbi-intervention-counters-bearish-tilt-2024-12-12/

2024-12-12 08:00

Vaar finds more oil near existing Arctic field Drilling for further reserves in the area Vaar is majority owned by Italy's Eni OSLO, Dec 12 (Reuters) - Norway's Vaar Energi (VAR.OL) , opens new tab has discovered additional oil reserves in its Countach appraisal well near the Goliat field in the Norwegian sector of the Arctic Barents Sea, the company said on Thursday. The preliminary estimated gross recoverable resources encountered in the well were between 4 million and 25 million barrels of oil equivalent, the company, which is majority owned by Italy's Eni (ENI.MI) , opens new tab, said in a statement. This brings the total estimated recoverable resources in the Countach discovery to between 10 million and 55 million barrels of oil equivalent, it added. "The discovery confirms the potential of the Goliat ridge," Vaar said. The company plans additional exploration around Goliat in 2025, targeting prospects with potential recoverable resources of more than 100 million barrels. Countach is located 13 kilometres (8 miles) northeast of the Goliat field which came on stream in 2016 and has seen declining production in recent years. "The potential to unlock significant additional resources is considerable, with the opportunity of being turned into high value barrels by utilising available production capacity at the Goliat facility," Vaar CEO Torger Roed said in the statement. The company aims to drill around 20 exploration wells in the Barents Sea region over a four-year period, as part of the group's overall plan to sustain long-term production of 350,000-400,000 barrels of oil equivalent per day. Vaar holds a 65% stake in the licence while Equinor (EQNR.OL) , opens new tab holds the remaining 35%. Sign up here. https://www.reuters.com/business/energy/norways-vaar-energi-finds-more-oil-near-arctic-goliat-field-2024-12-12/

2024-12-12 07:58

Class actions alleging widespread sexual harassment filed Lawyer says NDAs were routinely used to prevent women from speaking out BHP and Rio say they won't enforce past confidentiality terms MELBOURNE, Dec 12 (Reuters) - BHP (BHP.AX) , opens new tab and Rio Tinto (RIO.AX) , opens new tab have used confidentiality agreements to prevent female employees from speaking about sexual harassment at work, according to a lawyer leading Australian class action lawsuits against the miners. Brisbane-based law firm JGA Saddler filed a class action against each mining giant this week, alleging widespread and systemic sexual harassment and discrimination at Australian mine sites. The class actions promise more headaches for the two firms, which have struggled to rebuild their public image. A 2022 Western Australia state government review of remote mining sites found women frequently dealt with sexual harassment and sexual assault. The industry has also been held to account for the destruction of Aboriginal heritage, mine fatalities and environmental disasters in recent years. JGA Saddler has spoken to hundreds of women and seen evidence of the widespread use of non-disclosure agreements by the mining industry, lead litigator Josh Aylward told Reuters in an interview, adding some have expressed concern that the NDAs could prevent them from joining the class actions. BHP and Rio said they do not currently use NDAs when dealing with sexual harassment allegations. Mining companies have pressured vulnerable workers to sign agreements because they feared losing their jobs or being blacklisted from the industry, Aylward alleged. "It's common practice," he said. "There's a lot of other industries that have matured past the use of NDAs and realised that you have to front up for earlier sins, and if people want to talk about what happened to them, then they should be able to do it." Rio said in a statement to Reuters it would not enforce any historic confidentiality terms that prevented employees from discussing their personal experiences. A representative for BHP referred Reuters to the company's annual report, where it said it had stopped using NDAs relating to sexual harassment claims in March 2019 and doesn't enforce past agreements. Both companies also say they take all allegations of sexual harassment seriously and are seeking to stamp it out in the industry. Angela Green, who worked in BHP's explosives team from 2018-2024, said in a statement she plans to join the class action. She said she was unfairly terminated for falsifying a log book, which she denies, after she had made a complaint about sexual harassment. Green alleges she was subsequently offered compensation from BHP for the manner of her dismissal on condition she signed an agreement with a confidentiality clause. "BHP state office said if I signed it then they would clear my record and change it to say I resigned instead of being terminated," she said. The court filings have yet to be made public. According to a statement from JGA Saddler, the lead applicant in the BHP case alleges she was urinated on by a male co-worker, sexually harassed over a two-way radio and had another male co-worker defecate in front of her. The lead applicant in the Rio suit alleges she was sent unsolicited sexually explicit messages as well as videos and pictures from a colleague showing him masturbating in his on-site room. After her complaint, she was overlooked for opportunities to upskill, she said in the statement. JGA Saddler has requested the court redact the lead applicants' names in the filings amid concerns for their personal safety. The lawsuits were filed at the Federal Court and a judge will be assigned shortly. The judge will then set out times and dates in a hearing, expected to be in February. At that time, the court will order both miners to contact all women who have worked for them since November 2003. According to its annual report, BHP received 471 reports of sexual harassment in the 2024 financial year across its global operations. It investigated 100 cases and 103 workers were either dismissed, resigned or were removed from site if they were a contractor. Rio said last month that cases of rape and sexual assault at its mines persisted. An investigation found eight instances of actual or attempted sexual assault. Sign up here. https://www.reuters.com/markets/commodities/bhp-rio-pressured-women-sign-ndas-after-sexual-harassment-complaints-lawyer-says-2024-12-12/

2024-12-12 07:56

Drax reaches deal to supply US Pathway Energy project Planned project will make sustainable aviation fuel Could pave the way for Drax to become strategic partner LONDON, Dec 12 (Reuters) - British power company Drax (DRX.L) , opens new tab said on Thursday it had reached an agreement on the terms of a multi-year supply deal of biomass pellets for Pathway Energy's proposed sustainable aviation fuel project in the United States. Under the deal, Drax will supply more than 1 million tonnes a year of sustainable biomass pellets to the plant on the U.S. Gulf Coast. The plant will produce 30 million gallons of carbon negative jet fuel per year, equivalent to more than 150 million gallons of carbon-neutral blended sustainable aviation fuel (SAF). The plant should begin construction in 2026 and commercial production is expected to start in 2029. When fully operational, the plant will be capable of producing 30 million gallons of carbon-negative SAF annually, the equivalent of enough fuel to power 5,000 carbon-neutral long-haul flights over 10 hours per year. Pathway intends to develop a bioenergy with carbon capture and storage system at the site in Port Arthur, Texas, which could remove 1.9 million tonnes of carbon dioxide from the atmosphere each year. Airlines are under pressure to reduce emissions as the aviation industry generates roughly 3% of global emissions. SAF is made from renewable biomass or waste and is seen as a lower carbon alternative to petroleum-based jet fuel. SAF currently accounts for around 0.1% of aviation fuel used globally. The White House aims to meet all of the United States' aviation fuel demand with SAF by 2050 and to supply at least 3 billion gallons of SAF annually by 2030. Drax said the agreement could pave the way for it to become a strategic partner in the project and supply two additional Pathway SAF projects. Drax added that it could make a potential investment in the form of a convertible loan note of up to $10 million in the project, but no investment decision has yet been made. Sign up here. https://www.reuters.com/business/energy/drax-supply-biomass-pellets-us-aviation-fuel-project-2024-12-12/