BNP PARIBAS TO STOP FINANCING SHALE, OIL SANDS PROJECTS
The French bank BNP Paribas said it will no longer finance shale and oil sands projects, amid mounting pressure from investors who want firms to lower their carbon footprint, reports The Wall Street Journal.
BNP Paribas said “it would stop working with companies whose main business is the exploration, production, distribution or marketing of oil and gas from shale or oil sands,” write Noemie Bisserbe and Sarah Kent.
France’s largest listed bank is one of the first financial institutions to turn away from working with parts of the oil sector.
“These measures will lead us to stop financing a significant number of players that don’t further the transition toward an economy that emits less greenhouse gas,” BNP Paribas Chief Executive Jean-Laurent Bonnafé wrote in a post on LinkedIn published Wednesday.
Still, there is little sign that the shale oil sector is facing difficulty raising money. The industry has boomed over the last three years, despite a steep drop in oil prices.
Oil prices fell Thursday following a report showing an increase in U.S. crude stockpiles last week—another sign that the market’s recovery will be slower than expected.
Brent crude, the global benchmark, was down 0.4% to $56.71 a barrel in London midmorning trading on the Intercontinental Exchange.
On the New York Mercantile Exchange, West Texas Intermediate futures, the U.S. price gauge, fell 0.7% to $50.95 a barrel.
Also Thursday, the International Energy Agency said global oil supply rose in September, while demand growth slowed, reports Christopher Alessi.
The Organization of the Petroleum Exporting Countries reported on Wednesday its collective production shot up by 90,000 barrels a day in September, despite its efforts to curb output. The increase was driven by higher production in Libya, Nigeria, Iraq and Gabon.
Investors also continue to focus on U.S. oil supplies as a bellwether for the global glut that has pressured the market since 2014 and driven prices to below $30 a barrel in 2016.
On Wednesday, the EIA forecast total U.S. crude oil production would average 9.2 million barrels a day in 2017 and 9.9 million barrels a day in 2018, which would mark the highest annual average production in U.S. history.