1. Global rig count hits record low

– The U.S. rig count has hit its lowest level in decades, but the global rig count is also at a record low.

– Offshore rig providers are going bankrupt at the fastest pace in years. Valaris (NYSE: VAL) filed for bankruptcy this week, seeking to restructure $7 billion in debt.

– “Offshore drilling is structurally damaged, and recovery is not imminent,” Bernstein wrote in a note to investors.

– Valaris has a fleet of 55 rigs, but the company’s CEO Tom Burke said that the offshore rig market will suffer from a prolonged contraction.

2. Wind and solar financing scales up

– Solar PV and onshore wind (and increasingly offshore wind, although from a small base) have attracted trillions of dollars in asset finance over the past decade. In 2019 alone, the sectors attracted $271.5 billion.

– The sectors are now perceived as low-risk by investors, flipping the script when compared to oil and gas. Poor (and volatile) returns from oil and gas has led to capital shifting into renewables.

– Bloomberg profiled a Texas rancher who wants to install over 700,000 solar panels on his land, who specifically noted that oil and gas appeared financially risky – the rancher expected to see declining royalties over time. Solar, by comparison, was a safer bet.

– Citigroup (NYSE: C) CEO Michael Corbat said this week that the bank should start walking away from corporate clients…


Via Oilprice.com

READ ALSO  COVID Kills Another Oil Rally