Mitsubishi UFJ Financial Group Inc. and JPMorgan Chase & Co. have the biggest exposure to energy companies among banks, according to Citigroup Inc. analysts, Bloomberg reported Dec. 17.
This may make them more vulnerable to oil that’s at a five-year low.
Japan’s Mitsubishi UFJ granted about $81 billion (64.9 billion euros) of syndicated loans to the oil and gas industry from 2012 to December 2014, while JPMorgan loaned about $73.2 billion (58.7 billion euros), according to a report today by Citigroup analysts led by Ronit Ghose. They’re followed by Wells Fargo & Co.’s securities unit with $67.8 billion (54.4 billion euros) of loans, Citigroup said.
“In the past three years, U.S. banks have been three of the top five syndicated lenders to the global oil and gas sector,” said Ghose in the note. “Japanese and Canadian banks also feature strongly in syndicated loan tables.”
Oil prices plunged about 45% this year as a surge in shale drilling lifted U.S. output to the fastest pace in three decades as global demand slows. Members of OPEC, including Saudi Arabia, the world’s largest exporter, have resisted calls from producers such as Venezuela and Ecuador to reduce output to abate the price fall.
Mitsubishi UFJ Securities International Plc, the London based unit of the Japanese bank, this year joined JPMorgan, Deutsche Bank AG and Morgan Stanley in cutting back on commodities activities as regulators seek to toughen rules and curb speculation.
DNB ASA, Norway’s biggest lender, and Credit Agricole SA have the highest exposure among European banks to energy measured as a percentage of shareholder equity, Citigroup said.
Recommended Reading
Sangomar FPSO Arrives Offshore Senegal
2024-02-13 - Woodside’s Sangomar Field on track to start production in mid-2024.
The OGInterview: How do Woodside's Growth Projects Fit into its Portfolio?
2024-04-01 - Woodside Energy CEO Meg O'Neill discusses the company's current growth projects across the globe and the impact they will have on the company's future with Hart Energy's Pietro Pitts.
Deepwater Roundup 2024: Offshore Africa
2024-04-02 - Offshore Africa, new projects are progressing, with a number of high-reserve offshore developments being planned in countries not typically known for deepwater activity, such as Phase 2 of the Baleine project on the Ivory Coast.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.
Woodside’s GoM Trion Project Wins Social Impact Assessment Approval
2024-02-14 - Woodside Energy’s Trion is expected to start production in the Mexican sector of the Gulf of Mexico in 2028, and Woodside said the impact assessment will help the operator engage with local communities during the construction phase.