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Guyana, South America’s newest oil producer, by the collapse in crude prices.
has shortlisted 19 of the 35 companies that sub- In Chesapeake’s case, the filing has long been
mitted offers to act as marketing agent for five awaited; analysts have been predicting that the
crude cargoes over a period of 12 months. The company would enter bankruptcy proceedings
list of bidders moving on to the next stage of the since oil prices began to crash in March. Indeed,
tender includes two Chinese companies and the company was struggling prior to that to pay
three major commodities trading firms. down its debt, valued at $9.5bn at end-2019.
Chesapeake made a name for itself as one of
If you’d like to read more about the key events shaping the pioneers of the shale gas revolution, racking
the Latin American oil and gas sector then please click up billions of dollars’ worth of debt in the pro-
here for NewsBase’s LatAmOil Monitor. cess. The company had been trying to pay down
its balance under the leadership of CEO Doug
Middle East: A wider view Lawler, who also tried to pivot the firm towards
Regional steps are being taken to continue the oil production. The move proved ill-timed, as
move away from the ructions and ramifications two collapses in oil prices since 2014 have slowed
of the oil production cuts and oil price crash. No Chesapeake’s debt-reduction efforts and affected Chesapeake and
doubt we shall return to these matters, but for the the profitability of its new oil assets.
moment the net is cast wider. In a June 28 statement, Chesapeake said the Lilis are the latest
Highlighted this week is ADNOC’s sale of restructuring support agreement it had reached
20% and 15% stakes in its refining division, rais- with its lenders will allow it to eliminate around in a growing list
ing $5.8bn. That deal covered the 837,000 bar- $7bn of its debt.
rel per day Ruwais refining complex, an aging For its part, Lilis had $115mn in debt under of bankruptcies
85,000 bpd plant and a 1,900-km pipeline net- its revolving credit agreement as of the end of in the North
work.Pipeline developments are in focus in Iran, 2019. The company, which is a pure-play Per-
whose president has officially launched work on mian Basin producer, announced this week that American oil
an oil pipeline linking the Persian Gulf port of the restructuring plan it had agreed with credi-
Goreh in Bushehr province to Jask on the Sea of tors would eliminate almost $35mn of its debt. and gas industry
Oman. Construction work on this link, which Lilis cited the downturn in commodity prices
will bypass the Strait of Hormuz, is understood during the coronavirus (COVID-19) pandemic since 2015
to have begun nearly two months ago. as the reason for its Chapter 11 filing, saying it
Meanwhile, Iraq’s armed forces have taken had explored a variety of options for cutting
on one of the Iranian-backed militias, in a devel- costs, improving its liquidity and addressing
opment that may point to a potential calming debt maturities.
of matters in Baghdad. It remains to be seen The companies are the latest in a growing
whether Mohammad Khatami, the country’s list of bankruptcies in the North American oil
newly-installed president, will be able to exert and gas industry since 2015, many of which are
his authority over the various parties in this frac- shale drillers. According to law firm Haynes
tious country. and Boone, more than 200 North American oil
and gas producers, owing more than $130bn in
If you’d like to read more about the key events shaping debt collectively, filed for bankruptcy between
the Middle East’s oil and gas sector then please click the beginning of 2015 and May 2020. This year
here for NewsBase’s MEOG Monitor. alone, at least 20 companies had gone bankrupt
by May.
North American shale shifts
Two high-profile shale drillers, Chesapeake If you’d like to read more about the key events shaping
Energy and Lilis Energy, have filed for Chapter the North American oil and gas sector then please click
11 bankruptcy protection, having been hit hard here for NewsBase’s NorthAmOil Monitor .™

P10 www. NEWSBASE .com Week 26 01•July•2020