Feds are working on Lifeline for upstream oil companies

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Administration weighs support options for oil and gas industry. Bloomberg
The Independent Petroleum Association of America wants the Fed to permit oil companies to use loans under the Main Street program to pay off existing debt coming due amid the crisis. In a letter to Powell, IPAA president Barry Russell said that change would provide a “bridge to recovery for businesses that would have otherwise been able to meet their debt obligations, were it not for the virus.” Administration officials have indicated they are receptive to changes. “We are working very closely together to ensure all the folks in the producing community have access to those types of loans, that type of liquidity,” Energy Secretary Dan Brouillette said during a Tuesday interview on Bloomberg Television.

Drowning in crude, U.S. drillers say Trump strategic reserve plan is no lifeline . New York Times
President Donald Trump's plan to fill the U.S. emergency crude oil stockpile has become the centerpiece of his administration's strategy to shield drillers from a meltdown in energy demand - but company officials and industry groups say the program has been too slow and won't be enough to save them. Trump announced his intention to fill the U.S. Strategic Petroleum Reserve "to the top" on March 13 as global oil prices went into freefall amid the coronavirus outbreak as governments issued stay-at-home orders that have obliterated fuel demand.

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Trump Developing Plan to Aid Oil Industry Despite Opposition

A plan being weighed by Treasury Secretary Steven Mnuchin to steer financial aid to beleaguered oil drillers could set up a clash with Democrats who have warned against any bailout for the industry.

Mnuchin said he is considering a lending program for the companies that are seeking aid as they cope with a devastating plunge in prices.

“One of the components we’re looking at is providing a lending facility for the industry,” Mnuchin told Bloomberg News on Thursday. “We’re looking at a lot of different options and we have not made any conclusions.”

Taking a stake in oil companies was one of many options the White House was examining, Mnuchin told reporters Friday.

Industry allies have promoted several ideas, such as loans to distressed producers in exchange for government stakes or lifting restrictions on existing aid programs, which could complicate negotiations on future stimulus packages.

President Donald Trump pledged to make funds available to oil companies on Tuesday, and top cabinet officials have been huddling over a plan to deliver on the president’s tweeted promise to ensure “these very important companies and jobs will be secured long into the future.”

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