Fertilizer Markets and Finance

On this blog I make posts about what's new in the fertilizer industry and how it's markets are affected by geopolitical developments, environmental changes and monetary policies. This blog also focuses on developments in major fertilizer companies such as Potash Corp, Mosaic, Agrium, Uralkali and BPC. Thanks for viewing.

Jonathan Mohan


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Warm northern weather helps BHP →

THE scale of BHP Billiton’s expected writedown on last year’s $US20 billion push into the US shale gas industry could be less than originally feared, thanks to a rebound in US gas prices from 10-year lows.

Analysts were originally tipping a writedown of $3bn to $US5bn on the value of the shale business when gas prices sank to below $US2 a million British thermal units (mmBtu) in April in response to the surge in gas supplies brought on by the industry’s success in developing shale gas as a new energy source for the world’s biggest consumer of the fuel.

But warmer weather and its impact on airconditioning use has seen the price rebound to $US2.63 a mmBtu. The gain this week alone has been US41.7c a mmBtu or 18 per cent. But with gas storage across the US nearing physical capacity, it remains doubtful that US gas prices will trend back towards prices of more than $US4 a mmBtu seen during BHP’s acquisition spree last year.

BHP’s move into what was a new business for its petroleum division was achieved with its $US15.1bn acquisition of Petrohawk and the $US4.75bn acquisition of Chesapeake Energy.

In response to the gas price weakness, BHP is focusing on the liquids-oil rich acreage in its shale portfolio. The refocus is forecast to boost total group oil production across the next six years by as much as two-thirds.

Read more at The Australian

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