Kern County, California, Declares Fiscal Emergency Due To Slump In Oil Price -- January 28, 2015

Updates

February 4, 2015: Reuters is reporting --

Standard & Poor's Ratings Services revised the outlook for Kern County, California, to negative, after the county declared a fiscal emergency last week, citing lower oil prices.

The rating agency said it was concerned with a projected $27 million budget shortfall in fiscal 2016. By declaring a fiscal emergency, the county can access $40 million general fund reserve to cover the gap.

The third largest county in California, with a total population of nearly 900,000, Kern's pension obligations, already high, will "continue to rise for a number of years. The county is going to need to address that deficit going forward." Kern forecasts that its pension costs will increase through 2022 and has set aside portions of its reserves to account for the rising costs.

Original Post

The Los Angeles Times is reporting:

Kern County supervisors declared a state of fiscal emergency at their weekly meeting Tuesday in response to predictions of a massive shortfall in property tax revenues because of tanking oil prices.

Surging oil supplies domestically and weak demand abroad have left Kern, the heart of oil production in California, facing what could be a $61-million hole in its budget once its fiscal year starts July 1, according to preliminary calculations from the county’s assessor-recorder office.

Oil companies account for about 30% of the county’s property tax revenues, a percentage that has been declining in recent decades but still represents a critical cushion for county departments and school districts.

As of 2009, Kern is California's top oil-producing county, with 81% of the state's 52,144 active oil wells.

The county seat is Bakersfield.

***********************************

Chevron Grabs BP Projects in the Gulf

 Bloomberg is reporting:

Chevron Corp. is expanding its deepwater oil portfolio by assuming control of multibillion dollar projects from rival BP Plc as the U.K. company freezes wages and cuts spending in response to collapsing crude prices.

BP surrendered leadership of its Gila and Tiber oil discoveries and the Gibson exploration prospect in the U.S. Gulf of Mexico to Chevron under an agreement that also gives the U.S. company partial ownership of those assets, the companies said in separate statements Wednesday.

The deal underscores how stronger operators can benefit from new opportunities in the oil market downturn as rivals sell assets to raise cash and reduce costs.

*************************************

Sony's "Music Unlimited" Folds - Can't Compete With iTunes

Macrumors is reporting:

Sony announced on Wednesday that it will be shutting down its Music Unlimited on-demand streaming music service ahead of launching Spotify on PlayStation Music. Music Unlimited will shut down in all 19 countries it operated on March 29, 2015, with nearly all of the countries among the 41 regions that Spotify for PlayStation Music will be available upon launch, including the United States, Canada, Mexico and Brazil. 

The on-demand streaming music landscape has gone through significant change in the past three years, however, and Music Unlimited failed to remain competitive with industry leaders such as Spotify, Rdio, Pandora and Beats Music. Music Unlimited users with active subscriptions will continue to have free access to the service through the March 29 closing date.