News Wrap

IN THIS morning’s News Wrap: Rio Tinto executives in Mongolia stand down; BHP quietly leaves $7B oil venture; and Britain planning on fund from proposed shale industry.

Lou Caruana

Rio Tinto executives in Mongolia stand down

Rio Tinto’s relationship with the Mongolian government faces an even bigger test than first thought, with two of the company’s most senior executives in the developing country following the Mongolian Prime Minister’s lead by standing down, according to the Australian Financial Review.

Less than 48 hours after Mongolian Prime Minister Norovan Altankhuyag was squeezed out of the top job by a no-confidence vote in parliament, the Rio subsidiary that controls the miner’s interests in Mongolia announced that its chief executive and chairman were standing down.

BHP quietly leaves $7B oil venture

BHP Billiton has quietly walked away from a $US6 billion ($7 billion) oil and gas joint venture with fellow giants Hess Corporation and Chevron in the Gulf of Mexico, resulting in Deutsche Bank saying the miner was sacrificing value to maximise free cash flow, according to the Sydney Morning Herald.

Deutsche mining analyst Paul Young said he was “surprised” to learn that BHP had abandoned its 20% stake in the $US6 billion Stampede field in April.

Britain planning on fund from proposed shale industry

The British government plans to establish a sovereign wealth fund with the proceeds from extracting natural gas from shale, according to the Australian Financial Review.

The announcement, which may be seen as premature because no shale gas production is likely to occur in the near future, is another step by the government of Prime Minister David Cameron to encourage development of a shale gas industry and overcome public opposition to hydraulic fracturing, or fraccing.

Energy Minister Edward Davey said the sovereign wealth fund “was part of this government’s broader strategy to strengthen our security of supply in a cost-effective way for generations”

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