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April 24, 2020

US considers loan programme to support offshore industry

By JP Casey

US treasury secretary Steven Mnuchin has announced that the federal government is considering establishing a lending programme to provide financial support to the country’s oil and gas industry as the Covid-19 pandemic continues to throw doubts over the sector’s future.

“One of the components we’re looking at is providing a lending facility for the industry,” he told Bloomberg on Thursday. “Investment-grade companies will be able to either access the normal capital markets or will be able to access [the Federal Reserve’s] investment-grade facility.”

The move could be the latest in a series of government initiatives to support the US power sectors. Last week, energy secretary Dan Brouillette announced that mid-tier energy companies could see an increase in the maximum federal loans they are eligible to receive, with companies potentially able to apply for up to $250m in funding.

The industry is likely to be optimistic that the Trump Administration will be supportive, considering its longstanding support for the fossil fuels industry, in uncertain times for the sector. Oil prices fell below $0 on Monday, and had only recovered to $21.36 a barrel by Thursday for Brent crude.

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