• 6 hours Shell Oil Trading Head Steps Down After 29 Years
  • 10 hours Higher Oil Prices Reduce North American Oil Bankruptcies
  • 12 hours Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 14 hours $1.6 Billion Canadian-US Hydropower Project Approved
  • 15 hours Venezuela Officially In Default
  • 17 hours Iran Prepares To Export LNG To Boost Trade Relations
  • 19 hours Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 1 day Saudi Oil Minister: Markets Will Not Rebalance By March
  • 1 day Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 1 day Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 2 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 2 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 2 days Santos Admits It Rejected $7.2B Takeover Bid
  • 2 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 2 days Africa’s Richest Woman Fired From Sonangol
  • 2 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 3 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 3 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 3 days Lower Oil Prices Benefit European Refiners
  • 3 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 4 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 4 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 4 days OPEC To Recruit New Members To Fight Market Imbalance
  • 4 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 4 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 4 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 4 days GE Considers Selling Baker Hughes Assets
  • 5 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 5 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 5 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 5 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 5 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 7 days The Oil Rig Drilling 10 Miles Under The Sea
  • 7 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 8 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 8 days Italy Looks To Phase Out Coal-Fired Electricity By 2025

Undeterred By Refinery Losses, Standard Chartered Doubles Down On Energy

Standard Chartered

UK lending giant Standard Chartered Plc announced on Wednesday that it had increased the amount of loans to oil refineries by 24 percent as of the end of June over 2015 levels.

Standard Chartered, who has already seen billions in losses from its energy sector loans, is doubling down in the energy industry to the tune of $7.3 billion in outstanding loans to the oil refinery segment alone.

The lender, who is focused largely on emerging markets and therefore commodities, said their reason for the increase in oil refinery loans was due to the “broadly steady” profit margins during the period, which likely seemed logical, because in late 2014, downstream margins were great thanks to the crash.

Unfortunately, the recent Q2 reporting season shows that the current excess of gasoline stockpiles has caused a deterioration of Q2 refining margins across many players in the industry, including majors such as BP, Exxon Mobil, and Total SA.

For BP, Q2 2016 refining margins were the weakest in six years.

In 2015, Standard Chartered posted more provisions against bad debt than HSBC Holdings, Plc—a bank four times its size—or a staggering 87% increase in bad debts. Then in February 2016, it was announced that Standard Chartered had experienced its first full-year loss since 1989—largely due to the oil price rout.

Related: 6 Signs The Big Global Switch To Solar Has Already Begun

According to Standard Chartered’s annual report for 2015, $9.6 billion of its loans were to oil and gas producers, $7 billion to oil service companies, and $5.9 billion to refineries.

According to its Half Year Report 2016, Standard Chartered said that loan impairment doubled in the first half of 2016 over the last half of 2015, “primarily in the Oil & Gas and Metals & Mining sectors. We are continuing to proactively manage our commodity exposure.”

The report further explains that “89 per cent or $7.2 billion of the net exposure to clients can sustain an oil price of $30 per barrel for 12 months or to global majors or large SOEs.”

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News